Survive

Winter

Bitcoin

<p><span style="font-weight: 400;">As they say, winter was indeed coming. It arrived, but it did not leave yet. So, what comes next?&nbsp; Whether you're an experienced investor "buying the dip" and hoping for a price rebound, or a crypto maximalist looking for signs of recovery to offset your setbacks, the question on everyone's mind in the crypto space, from investors to developers, is: when will the crypto winter thaw? Unfortunately, with relatively new assets like cryptocurrencies, it's not easy to give a clear answer.&nbsp;</span></p> 
<h2 id="span-style-font-weight-400-what-is-a-crypto-winter-span"><span style="font-weight: 400;">What is a Crypto Winter?</span></h2> 
<p><span style="font-weight: 400;">In order to manage the times we are in, we need to understand the conditions. The crypto winter has "chilled" the entire market, including industry pioneers such as Bitcoin and Ethereum, leaving a near-freezing effect on prices compared to previous peaks. As can be seen in the Bear market, digital assets struggle below the higher price levels that they have not been able to hold for a long time, leaving the investor in the grip of gloomy thoughts and potential losses.</span></p> 
<p><span style="font-weight: 400;">It can be difficult to list the reasons for crypto winter. They can overlap with predictable reasons such as the current dismal economic climate and the bear market itself. It is understandably influenced by factors such as declining purchasing power and distrust for exchanges and brokerage firms. But in the same way, these digital assets can also be fueled by counterproductive events in the non-crypto market, such as rising inflation rates, devaluation of the local currency. Thus, it's not accurate to claim a direct connection with economic downturns.</span></p> 
<p><span style="font-weight: 400;">Crypto assets are still difficult to predict. They lack clear rules and act more independently. That's why we can't make sharp statements like the bearish stock market, which is determined by a 20% price drop in stocks. Using the right market analysis and preparing ourselves for the cold winter with good strategic planning is the right way to get through it, rather than relying on rules and myths.</span></p> 
<h2 id="span-style-font-weight-400-ways-to-survive-a-crypto-winter-span"><span style="font-weight: 400;">Ways to Survive a Crypto Winter</span></h2> 
<h3 id="span-style-font-weight-400-trade-less-learn-more-span"><span style="font-weight: 400;">Trade Less, Learn More</span></h3> 
<p><span style="font-weight: 400;">We don't want to stretch the metaphor, but a smart strategic move to get over the crypto hump would be to "hibernate", so to speak. In a hundred-year-old investment market, such as the stock market, we are accustomed to the feeling that the market will rise sooner or later. But we can't be sure whether history will repeat itself for crypto assets we're just getting to know. That's why it's better to avoid high-risk moves and go for a light retreat. We need to step away from panicked moves and set our sights on longer-term plans. As an example, it is worth underlining that long-term investors are still in profit compared to </span><a href="https://www.statista.com/statistics/326707/bitcoin-price-index/" target="_blank" rel="noopener noreferrer nofollow"><span style="font-weight: 400;">5 years ago</span></a><span style="font-weight: 400;">.&nbsp;</span></p> 
<p><span style="font-weight: 400;">We can use this time to improve ourselves, to master these still unfamiliar digital assets or learn to </span><a href="https://www.morpher.com/blog/candlestick-patterns/" target="_blank" rel="noopener noreferrer nofollow"><span style="font-weight: 400;">interpret candlestick patterns</span></a><span style="font-weight: 400;"> to understand price movements correctly. This will not only prepare you for the period of volatile markets that will come after the winter, but also develop you as a smart investor in general. By trading less, you can minimize risk and avoid large losses, while at the same time educating yourself and building a strong foundation to take smart steps that will turn into profits in the period ahead.</span></p> 
<h3 id="span-style-font-weight-400-focus-on-cryptos-with-proven-utility-span"><span style="font-weight: 400;">Focus on Cryptos With Proven Utility</span></h3> 
<p><span style="font-weight: 400;">We can argue that the longer the crypto winter lasts, the harsher the effects will be. One of these harsh effects is the elimination of cryptocurrency projects that cannot survive the prolonged low price level and decreasing investor interest. In other words, the harsh winter will show that "survival of the fittest". Projects that will not bring innovation to the financial world or deliver on their promises are unlikely to survive long term. But projects that are part of a decentralized, revolutionary financial system will undoubtedly be the winners. To be on the winning side as an investor, it is worth investing in projects that have proven to be useful. Exploring these projects can also be part of the educational process we have set aside for ourselves. Whitepapers and protocols are a good start to understand the project's potential and the promises it aims to fulfill.</span></p> 
<h3 id="span-style-font-weight-400-short-selling-span"><span style="font-weight: 400;">Short Selling</span></h3> 
<p><span style="font-weight: 400;">In periods of market downturns like a crypto winter, it is important to plan ahead to minimize losses. Timing is of the essence when planning the next move and patience is key to making the right decision. For those who think long term, who buy low and sell high, crypto winter is the wrong time to sell, as it can lead to losses. But the same cannot be said for short sellers, who aim to profit from declining asset values. Since this strategy aims to take advantage of the fall in asset prices, it may be a suitable approach during crypto winter. In this strategy, you can generate profit by borrowing assets and selling them at current market rates, with the intention of repurchasing them at reduced prices later. Short selling is like a rose with thorns. The potential gains increase, but so do the risks. Markets can be unpredictable and timing short positions correctly requires skill and insight that can only be gained through self-education and experience over time, as mentioned in the first tip.</span></p> 
<h3 id="span-style-font-weight-400-avoid-leverage-trading-span"><span style="font-weight: 400;">Avoid Leverage Trading</span></h3> 
<p><span style="font-weight: 400;">As we've emphasized before, the wise path is to prioritize safety and minimize risks during this period.&nbsp; It is only smart to avoid transactions where the risk level is very high, including leveraged transactions. In the world of crypto assets, which are already characterized by their volatility and uncertainty, trading with leverage can significantly compound the complexity of the situation. It is especially dangerous for inexperienced investors to trade at risk levels that they are not comfortable with, in terms of the negative consequences that may arise.</span></p> 
<h3 id="span-style-font-weight-400-dollar-cost-averaging-dca-span"><span style="font-weight: 400;">Dollar cost averaging (DCA)</span></h3> 
<p><a href="https://thebittimes.com/what-is-dollar-cost-averaging-dca-and-how-does-it-work-tbt20961.html" target="_blank" rel="noopener noreferrer nofollow"><span style="font-weight: 400;">DCA </span></a><span style="font-weight: 400;">strategy provides a method to steady your investment balance amid the volatile crypto market. The aim is to protect you against sudden and unexpected price swings. This method involves investing a fixed amount at consistent intervals, independent from the market’s price fluctuations. This approach is designed to achieve a balance factor in your investments. Averaging out investment costs over time shields you from instances of fear or panic.</span></p> 
<h2 id="strong-final-words-strong"><strong>Final Words</strong></h2> 
<p><span style="font-weight: 400;">Even in the darkest times, holding on to a sense of optimism and believing that better days are ahead keeps us motivated. Just as the snow melts to reveal the promise of spring, the current downturn in the crypto market will give way to times of growth. It's easy to feel defeated during these darkest times, yet history shows that every downturn is followed by a possible upturn.</span></p> 
<p><span style="font-weight: 400;">It is highly recommended to keep your spirits high and your eyes on the horizon.Try to stay connected and not get resentful towards the market itself. The difference between you and the investor who is not happy with the returns on their investments is the ability of forming your own opinions by doing your own research. The next bull run will eventually come and when it does, you can enjoy being ready to make the most of it.</span></p>

How to Survive the Crypto Winter

Table of Contents

TheBitTimes

Other articles published on Aug 23, 2023

Bitcoin Cash (BCH) Price Analysis: More Than A Savior, Will 200-day EMA Prove A Great Buying Spot?

Ethereum Price Analysis: With A Pennant Breakdown, Will ETH Price Float Above $1600?

Decoding JPMorgan’s Impact: Ethereum’s Success and Ripple’s XRP Setbacks

Policymaker: US doesn’t need a retail CBDC

NFTs VS Traditional Art - Will NFTs Replace Traditional Art Form?

Former FTX boss plans to blame prior legal counsel ahead of October hearing

Join our free newsletter for daily crypto updates!