The 7 Survival Rules in the Crypto Bear Market: Ways to Break Through

The crypto market is like a roller coaster; ups and downs are the norm. During bull markets, everyone celebrates, while in bear markets, people become anxious. As an investor, you need to understand the essence of these cyclical fluctuations — they stem from a complex interplay of investor sentiment, technological innovation, regulatory changes, and macroeconomic trends. As the crypto market matures, mastering how to switch strategies across different cycles becomes an essential survival skill.

What exactly is a bear market?

Different investors have various definitions of “bear market.” The traditional definition is a price drop of over 20% from a high point, but this seems too mild in the crypto world — here, 90% crashes are common.

A more accurate description is: a bear market is a prolonged period of stagnation, where market confidence collapses, prices continue to decline, and selling pressure far exceeds buying interest. In simple terms, it’s a recession marked by a significant slowdown in economic activity.

Think back to the “crypto winter” from late 2017 to mid-2019 — Bitcoin plummeted from $20,000 to $3,200, and many investors’ accounts evaporated. Bear markets typically occur every four years and last more than a year, which is why planning your investment strategy in advance is so crucial.

How to survive a bear market? 7 winning strategies

Facing red numbers in your account makes it extremely difficult to stay rational. But the key is to take proactive action — protect your principal and prepare for the next opportunity.

First tip: HODL (Hold On for Dear Life)

HODL originated from a typo — someone meant to type “hold” but typed “hodl,” and the term caught on. It has since evolved into a belief.

The core logic of HODL is simple: buy assets and hold long-term, regardless of market fluctuations. True HODLers don’t just endure; they fundamentally believe that crypto technology will transform the entire financial system.

When should you HODL? Basically, “forever.” More specifically:

• If you’re not good at short-term trading (day trading, high-frequency trading, these aren’t your thing)
• If you are a true believer in this industry, convinced that crypto is the future

HODL can also help you escape FOMO (Fear of Missing Out) and FUD (Fear, Uncertainty, Doubt). These emotions often stem from short-term market movements, but HODLers keep their eyes on the bright future ahead.

Second tip: Dollar-Cost Averaging (DCA)

DCA is another steady approach. You invest a fixed amount regularly, which automates buying more assets during dips, spreading risk over time.

The process is straightforward:

1. Choose your investment target (e.g., BTC)
2. Set your investment amount per interval (e.g., $100)
3. Decide your frequency (e.g., buy once every week)
4. Use a reliable trading platform and secure wallet

Many beginners or those with limited time to analyze the market find DCA suitable. It helps you build positions at low prices, provided you stick to the plan. Even experienced traders benefit from it — it enforces discipline and prevents emotional decisions.

Third tip: Diversify investments (spread your bets)

Don’t put all your eggs in one basket. To build a risk-resistant portfolio, you need exposure across different crypto asset classes.

In bear markets, different coins perform very differently. Some crash hard, others hold up relatively well. You can:

• Diversify by category: Proof of Work, Layer-1, Layer-2, Metaverse, Web3, NFTs, GameFi, AI-related projects
• Diversify by market cap: Large-cap coins (like BTC) are more stable; small-cap coins are more volatile but offer higher doubling opportunities
• Diversify geographically: Besides crypto assets, allocate traditional financial assets (stocks, bonds, real estate, commodities) to reduce overall risk

Key points:

• Read whitepapers: Check if the project’s vision and tech are solid
• Study tokenomics: Understand inflation mechanisms and incentive structures for sustainability
• Observe price history: Look for abnormal crashes, which might indicate whale manipulation

Bitcoin (BTC) holds a special position. As the “digital gold” of crypto, BTC’s scarcity and institutional backing make it the most stable choice during bear markets. While its gains aren’t as wild as smaller coins, its volatility is relatively moderate — exactly what you want in a bear market. Currently, BTC is around $88.65K, with a 24-hour increase of +1.33%.

Other categories include:

• Stablecoins (USDT, USDC, etc.) serve as “safe havens” during bear markets, waiting for the best entry points
• Small-cap coins, though risky, can give 10x or 100x returns upon rebound
• NFTs, still emerging, can connect you to Metaverse, GameFi, and other new fields

Fourth tip: Short selling (reverse trading)

Bear markets don’t necessarily mean giving up. If you’re willing to play, you can profit from shorting.

The logic of shorting: Borrow assets → Sell immediately → Wait for price to fall → Buy back at lower price → Return borrowed assets → Pocket the difference. Basically, “bet on falling prices.”

But beware: shorting is advanced and risky — handle with caution. Leverage trading is even more dangerous.

Fifth tip: Hedging (insurance strategies)

Hedging is like insuring your investments. For example, holding a large amount of BTC while taking an equal short position in futures markets can keep your overall assets relatively unaffected regardless of price movements — losses are limited to trading fees.

Common hedging tools:

• Futures: open long (bullish) or short (bearish) positions
• Options: give you the right to buy or sell assets at a specific price within a timeframe

This approach is best suited for investors wanting to avoid market volatility and protect their capital.

Sixth tip: Limit orders (laying traps at the bottom)

Many experienced traders set “crazy low” buy orders, waiting for market crashes to execute automatically. While accurately bottom-timing is tough (markets run 24/7, and flash crashes happen suddenly), placing several low-price buy orders can help you pick up bargains unexpectedly.

Seventh tip: Stop-loss orders (firewalls)

Stop-loss orders act as your firewall. When the price drops below your set level, the system automatically sells, limiting your losses.

It may seem passive, but it helps:

• Keep rationality and avoid emotional trading
• Clearly define your risk threshold
• Free you up to look for the next opportunity instead of constantly watching the screen

The ultimate rule for bear market investing

Besides these 7 tips, some universal principles apply:

Invest only what you can afford to lose: Crypto markets are unpredictable. Even if you study all strategies, losses can happen. Beginners should start small, observe, and learn.

Keep learning constantly: Follow industry news, deep analyses, KOL opinions. But more importantly, develop your own judgment rather than blindly following trends.

Do thorough due diligence: Before investing, understand the project — research the team, review product development, assess technical feasibility. Avoid rushing in just because someone said “this coin is about to moon.”

Secure your assets properly: Cold wallets (hardware wallets) are the safest. Store private keys offline to prevent hacking. Brands like Ledger and Trezor are trustworthy.

Set realistic goals and risk tolerance: Before entering, ask yourself: “How much profit do I want? How much am I willing to lose?” Use these figures to set take-profit and stop-loss orders, letting automation handle decisions and avoiding emotional mistakes.

Summary

A bear market isn’t a disaster for seasoned investors — it’s a test. With the right strategies, you can not only survive but also accumulate more chips than you imagined.

This article outlined the 7 most practical tactics for bear market investing, from mindset adjustments to operational strategies, risk management, and low-buy opportunities. Remember: the biggest lesson of a bear market is — risk management always comes first. Only by surviving long enough can you laugh last when the next bull market arrives.