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A Bear Market Advantage

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Young Kedar
@young-kedar
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3 min read

Bear markets aren't fun at all. They can be quite depressing, 'holding tight' and waiting things out is something that most people can't do. Fortunately for us here on Hive, there is still activity when the bear hibernates. Giving us the opportunity to work while waiting for the markets to recover.

While there are many reasons why investors may choose not to invest during bear markets, there are also some real benefits hidden under the surface that we could discover by actively searching for opportunities instead of sitting out during times like these.

Some obvious advantages of a bear market is that it's a good time to buy, opportunities are easier to find and there's less competition.

Less Mainstream Exposure

In a bear market, it’s also not uncommon to have less exposure to the mainstream. At times like these, there is simply less activity in terms of hype or thrill going on.

This can be an opportunity for the investor or trader because it means there are fewer distractions and less noise in the market. Which also means having more time on their hands to think through their investing plans and strategies, leading them down different paths than they would otherwise not take. A 'moment of clarity' type of thing.

BUT, taking an overview look of this bear market will give a different message than the one mentioned above; It is full of activity! 'Moments of clarity' are often mingled with 'moments of insanity'.

Actively Searching for Opportunities

As an [investor]( https://leofinance.io/@leoglossary/leoglossary-investor) in general, bear markets are a great time to go shopping in search for opportunities. This means analyzing the market and looking for patterns, learning how to identify opportunities by observing how different projects are performing within a given time frame/metric.

Some projects may be doing well despite the bear market, which means they’re undervalued and could provide an opportunity for growth over time (e.g Hive).

And others may be struggling with their current situation but have potential for growth in the future, which means they might be worth buying now at lower prices before their value goes up again (e.g Splinterlands).

Knowing When to Buy

When the market is in a downtrend and you're looking to [buy]( https://leofinance.io/@leoglossary/leoglossary-buy), knowing when to get in can be the million dollar question.

Ideally, you want to buy at a bottom. But how do you know when one has occurred? I think the best way is through experience, as every market is different and there are no hard-and-fast rules for buying during a bear market.

However, there are some things that can help guide our decision-making process:

  • Don't buy the first dip: You'll never know if this is just another false start or an actual bottom until it's too late.

  • Don't buy the first rally: It could be just another spike before things continue downward again; better to wait until things settle down before jumping into it.

  • Don't buy the first breakout: This move could signal further upward momentum or it could signal an unsustainable advance that will run out of steam shortly after making its move higher.

The bottom line is that 'the first' is usually not a good time to buy. However, it's still not a loss if you do end up buying i.e as far as you don't sell.

In Conclusion

There are advantages and disadvantages in a bear market, the same also applies to a [bull market]( https://leofinance.io/@leoglossary/leoglossary-bull-market). Some of the bear market advantages are obvious but they somehow elude many individuals because the disadvantages tend to be magnified.

This doesn't mean I'm discrediting the fact the disadvantages of a bear market can be as severe as getting one's life savings wiped out. Here, I'm just focusing on another perspective which is its advantages.

In my opinion, a bear market can be the best time to start out in a market(crypto) because it helps in laying out a good foundation in terms of concepts, knowledge and perspective.


Thanks For Reading!

Profile: [Young Kedar](https://leofinance.io/@young-kedar)

Recent Posts; ● AI's Influence On The Economy ● Navigating Through The FUD In The Markets ● The 'Multidimensional' Nature Of Crypto ● Simple Tips To Better Manage Personal Cash Flow ● A Means To An End

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