How to Day Trade Crypto and Survive in a Bear Market

How to day trade crypto and survive in a bear market? You may day trade your crypto in a bear market but to survive in it you will need to follow the right approach.

For this, you will first need to understand the bear market and the reasons that cause it.

This will help you to plan your moves accordingly to meet your investment objectives and overcome the challenges thrown at you by the bear market.

A bear market will provide you with more volatility across all asset classes and therefore apart from the general options trading strategies, the market will offer much more to the crypto traders as well as the long-term investors to make more money, and one such is crypto day trading.

However, there is no guarantee that you will always be successful.

There are several strategies to follow and things to know if you want to survive in a bear market while trading your crypto assets.

If you are unaware of those things, fortunately, you are in the right place since this article will cover them all.

How to Day Trade Crypto and Survive in a Bear Market?

How to Day Trade Crypto and Survive in a Bear Market

Typically, there are three most important and basic strategies to follow in a crypto bear market which are different from those standard techniques for day trading that are oriented and pertain to traditional markets that are up, down, or ranging.

But first, you will need to know what a bear market actually is and what causes such situations.

Get to Know the Bear Market

Going by the definition of a bear market, it refers to a drop in the value of the asset, and this drop is nothing less than 20% of the original.

Anything less than that is ideally termed as ‘correction.’

Generally, a bear market is caused by a retrenchment in credit creation, especially in the private sector.

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This can be the result of the over-tightened monetary policy.

In a traditional financial market, the rates of interest are matched accordingly so that there is an equilibrium maintained between the output and the price pressures.

However, if the monetary policy is excessively constrictive, it may result in a recession.

In other words, the borrowers in the market will feel the pressure due to the high rates of interest and their burden will increase far beyond their ability to repay.

This will result in defaults and that in turn, will force the central banks to restructure the policy.

The crypto market also experiences somewhat similar effects due to the changes in policies with the only difference that these changes are seldom made but the government or any other central governing body.

In short, in a bear market, consumer spending is low, credit growth is slower, and interest rates are high.

All these eventually result in the prices of risk assets falling significantly and at the same time income also reduces.

On the other hand, prices of safe assets rise.

This causes a significant reduction in the investment of stocks, shares, and crypto, all of which are risk assets.

This is because people look for assets and other currencies that are real and inflation-hedged like cryptocurrencies.

While you are day trading your crypto, it is quite easy and natural to lose track of the bigger picture because you will be trading on a very small time frame.

Follow the Right Approach

In order to prevent that and survive in a bear market that progresses in a very mechanical but logical fashion, it is important to follow the right approach.

Short Selling

This is one common thing to do in a crypto bear market in order to survive.

Short Selling or Shorting as it is commonly known, is a process that involves borrowing and then buying them back to cover that position at a later time.

You can make a profit if the prices of the asset decrease by that time and lose if it does not.

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Short selling is often overlooked by day traders who are new to this field but this can really prove to be a very profitable approach in a bear market to survive.

However, it is more complicated than being long and the loss potential in this process is also significantly high since you can lose more than 100%, in the case when you owe some money to the broker.

Buy The Dip

This is another way to survive while day trading your crypto in a bear market though it is quite a common strategy that is followed in the bull market.

However, if you follow this approach in a bear market, you can take advantage of the reversion strategies.

This is quite an effective strategy because buying pullbacks is a common strategy for day trading.

It is also a good approach to follow by those crypto day traders who are not much comfortable with short selling considering the risks involved in it.

Hold on

Well, if you want to play safe, you can even choose to stay out of the market.

This way you will win half of your battle to survive in a bear market because you will not be trading too much to enhance the possibilities of yourself being wiped out of the market altogether.

You should trade in a bear market when you are certain that you have a significant edge.

It will be unwise to trade in a bear market just because you need some action or are impatient to wait till the time when the market conditions are favorable. This is how most people lose their money.

Buy Right

If you really have to participate in trading in a bear market and still want to survive, you should make the right crypto purchases.

This will prove to be quite beneficial in the long run.

This is important because you will not want to make a premature purchase and miss out on the opportunity to make a good investment altogether.

Therefore, be patient, understand the market and the prices of crypto coins, and follow your plan.

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Since it is all about speculation, you can circumvent the risks and other issues by investing a fixed amount of money at regular intervals irrespective of the direction of movement of the crypto market.

This process is typically called Dollar Cost Averaging.


Focus more on diversifying your crypto portfolio rather than putting all your money into one.

This is also a proven way to survive in a bear market while day trading crypto.

Experiment on many different types of crypto coins with smaller amounts but make sure that you close your positions within the day.

This is important because, at a time, all types of crypto coins will not go through dips.

Therefore, make a well-researched and controlled investment to build your crypto portfolio in a bearish market.

Think for the Future

Since you cannot become a millionaire in crypto overnight, you should think about everything for the long term.

Look at the future and make some investments accordingly.

A bear market is probably the best catalyst for it.

With the prices of crypto assets significantly low, it is a good time and place to find some good crypto coins at low price and add them to your portfolio.

It will help you a lot in the long run and provide significantly higher returns.


Without following the right approach in a bear market there is no way in which you can be successful in your crypto trades and survive. To ensure that you will need to know about a lot of things, all of which are covered by this article.