The winter slump in the cryptocurrency market continues, with the price of Bitcoin and other cryptocurrencies remaining at relatively low levels, especially when compared to their all-time highs towards the end of 2021. It is possible that hodlers who intended to cash out your profits at this time are now wondering if it would be better to cut your losses or continue to hold until we see a new bull market. But is there a way to make money during a bear market? Any experienced trader will tell you that it is. Trading strategies for trading crypto during bear markets are similar to those employed in the stock market, or financial exchanges for fiat currencies. In this article, we will discuss some strategies that you can use during bearish times.

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Do you know about Short positions?

According to financial terminology, a short call option consists of betting that the price of a certain asset will fall. The term came into the public domain thanks to Michael Burry and his “Big Short” strategy. Burry spotted the signs heralding the collapse of the dot-com bubble and later the subprime mortgage crisis, and he bet against big-name companies in both cases, selling short and managing to increase the value of his hedge funds during the market. bass player. As with company stocks, it is also possible to adopt the strategy of selling short when we are facing a crypto bear market.

How can you short a crypto asset? Bybit offers you several possibilities for this purpose. A Bybit client recently used this strategy and saw positive results. Bybit’s client predicted that the market trough would continue, and opted to open put options on Bitcoin (BTC). Even when the price of BTC fell below $37,000, Bybit’s client reserved the right to sell at the $40,000 strike price, making a profit of $3,000 per BTC when it fell.

But it is also possible to profit during a bear market without using put options, by shorting. It consists of selling an asset and waiting for the price to decrease before buying it back, so that you maintain ownership and receive benefits for the price difference. The most famous example of short selling is George Soros, who shorted sterling in 1992. The Soros fund bought and sold every pound it could get his hands on, creating utter chaos in the world. Bank of England before buying back pounds when their value plummeted, taking $1 billion in profit.

The short sale of crypto assets is governed by the same principles. In fact, the high volatility of cryptocurrencies makes this strategy particularly effective. Take the Shiba Inu (SHIB) as an example : its price is down 75% from its all-time high. A Bybit user sold a large amount of SHIB for $0.00006129 per coin to buy back for $0.00002055, earning thousands of dollars in profit and keeping ownership of the meme coin so he could retain or repurchase. sell short.

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Buy the fall to make profits

Even if you don’t feel comfortable going against the crypto sphere, it’s possible to use the bear market to your advantage and bet on the long-term success of cryptocurrencies. When using the “buy the dip” strategy, a decline in the price of a crypto asset is not a disaster, but rather a sign that the time has come to accumulate coins and hold onto them until the next bull market arrives. In this case, a devaluation offers us the opportunity to include more assets in Bybit’s portfolio at a reduced price and wait until it is profitable to withdraw them.

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Shorten, retain and more with Bybit

The opportunities to make money in a bear market can be just as lucrative as in a bull market, it’s just a matter of employing different strategies. Bybit puts at your disposal all the tools you need to face rising and falling markets, thanks to Bybit’s advanced analysis and intuitive platform. Also remember that Bybit’s cloud Bitcoin miner continues to reward active users with Bitcoin, whatever the market conditions. If you want to know how you can benefit from the crypto bear market with Bybit, sign up in a few seconds and create a demo account. You will be able to test these strategies for free and apply them to the simulated conditions of the real market that Bybit offers you.