BeInCrypto News Show: 3 Crypto Bear Market Tips

In this episode of our video news show, Juliet Lima shares three tips for surviving the crypto bear market.

Check out our latest crypto bear market video for more tips.

Make money with covered bitcoin options

Juliet explains why options trading is a big challenge, but at the same time offers great opportunities to make a profit in a crypto bear market. An option is a contract that allows the buyer to buy or sell an asset on a specific date and price.

That There are 2 types of options: calls and puts. A call gives you the right, but not the obligation, to buy an asset on or before a certain date. A put gives you the right to sell an asset on or before a certain date at a certain price. In short, you have the right to buy a call and the right to sell a put.

The price agreed in an option is called “strike price ”. The expiration date is called “Expiration date”. The purchase price for the option is called option premium designated. The premium is the price the buyer pays to the seller of the option for the right to buy or sell the asset at a specified “strike price” before the expiration date.

American and European opportunities

There are two different options on the market: American and European. In the first variant, the buyer can do this Redeem just before the expiration datewhile in the second variant this only on the expiration date can happen.

Let’s look at an example. Let’s say you want to sell a Bitcoin-covered call option. With the European variant, you could only do this on the predetermined expiration date.

The reason we want to sell the option is that we are bearish on the bitcoin price. So if the price at the time of sale is below the current price, then we would make money. But if the Bitcoin price rises, then we will have to sell our Bitcoin, which we previously bought to cover, to cover the loss.

For example, if we assume that the bitcoin price will not rise above $ 45,000 the next day, then we could sell a call option for $ 45,000 with an expiration date of 30 days. In this case, the buyer of the option would pay us an option premium or a certain price for the option.

If the 30 days have passed and the Bitcoin price is below the USD 45,000 mark, then the price is below the strike price. This means that the opportunity for which we received a bonus is worthless. The difference between the option premium or the option price on the date of purchase and sale is then our profit. Conversely, in case of loss, we will have to pay a higher premium to the buyer of the option.

Elliot Wave Theory: Learning crypto strategies in the bear market

However, you can invest your time not only in options trading but also in trading training. For example, look at Ralph Nelson Elliot’s Wave Theory.

Elliot spent 75 years analyzing stock market data and deriving theories for technical analysis. He was looking for patterns related to investor and trading sentiment and price psychology. In addition, the Elliot Wave theory is well suited for identifying highs and lows. This is why some analysts believe that Elliot’s wave theory is perfect for the crypto market, which is characterized by repeated euphoria-triggered heights in bull markets or fear-led divestments in bear markets.

The wave theory is based on so-called fractals. These are mathematical structures in which a pattern is repeated over and over again on a smaller scale. For example, there is often a five-wave price action in the direction of the current trend, followed by a three-wave price action in the opposite direction. So if we are in a crypto bear market, then there will be five-wave-down movements followed by a three-wave-up move.

Elliot Wave Theory can also help you predict trend changes. The wave theory is not easy to learn and many also see the theory in a critical light. For example, it is difficult or not always possible to clearly identify the start and end points of the waves. However, the theory can help you find good entry and exit points in a crypto bear market or even assess the end of it relatively well.

Crypto Bear Market: An image from BeInCrypto.com

Crypto bear market: Stay calm

Finally, Juliet reminds us that we are all human. We have our faults and shortcomings. When faced with the possibility of total loss, it is normal to want to stay away from the situation.

But if you can manage to be numb in the crypto bear market, then you can look at it and crypto from a completely peaceful perspective. You do not have to time your trades perfectly. You also do not necessarily have to sell.

With all the negative headlines surrounding the cryptocurrency crack, the true crypto enthusiasts are buying more. They believe that crypto is the future and they want to be a part of it.

Honestly, very few people can stay calm in the current crypto bear market. Many people find it difficult to be neutral about their emotions when investing and to be grateful for the cryptocurrencies they invest in.

All the advice shown here involves some risk. Therefore, you should inform yourself in detail about the risks and be aware of them.

Disclaimer

All information on our website has been examined to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action taken by the reader based on the information on our website is entirely at his own risk.

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