 ▲ Female cryptocurrency investor, Bitcoin/ChatGPT generated image |
As the downturn in the virtual asset market continues for an extended period, investor sentiment has reached extreme fear. However, some are presenting specific response strategies to turn the crisis into an opportunity.
On Feb. 19 (local time), according to cryptocurrency-focused media outlet BeInCrypto, digital asset data analytics platform Arkham announced six key strategies to generate profits or protect assets even in the current bear market. Arkham noted that the cryptocurrency market is highly volatile, with declines typically reaching 70% to 90% from peak levels, emphasizing that thorough risk management and emotional control are essential elements of successful investing.
The first strategy proposed by Arkham is short selling, which bets on declining asset prices. This involves borrowing digital assets and selling them at the current price, then repurchasing them later at a lower price to repay the loan. However, as losses are unlimited if prices rise, precise position sizing is required. As alternatives, the use of put options—where losses are limited to the initial investment—or inverse products that move opposite to the underlying asset were also suggested as effective measures.
In sideways markets, range trading using support and resistance levels can be effective, while for investors who prefer to avoid active trading, accumulating high-quality assets at lower prices was recommended. Arkham analyzed that patient accumulation with a long-term perspective—preparing for the next bullish cycle rather than seeking immediate profits—has historically generated high returns. Additionally, earning yield through deposits of stablecoins such as USDT or USDC was mentioned as a defensive strategy to protect capital while generating returns.
Scalping and day trading that capitalize on short-term price fluctuations also play a role in profit generation. Arkham explained that repeatedly capturing small gains by identifying temporary rebounds characteristic of bear markets or price imbalances arising from liquidity gaps can be effective. However, it warned that reduced liquidity may widen the bid-ask spread, creating slippage risk, and that accumulating losses can cause psychological pressure that undermines investment principles.
Although a cryptocurrency bear market is a painful period marked by sharp declines in asset values, it can serve as a springboard for a new leap forward for prepared investors. Arkham advised market participants to choose strategies aligned with their individual risk tolerance and to make objective decisions based on technical indicators and on-chain data. In a situation where it is difficult to predict the end of a downturn, strictly adhering to principles is the only way to smile in the next bull market.
Disclaimer: This article is provided for investment reference purposes only, and we are not responsible for any investment losses resulting from its use. The content should be interpreted for informational purposes only.