Bear Markets & The Creative Power Of Frustration

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15 Apr 2024

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Got You Again!
The number one tool leveraged by a bear market against market participants is that of optimism, followed by disappointment. How many times have weary investors thought that it was finally over? This is such classic bear market psychology, and yet it manages to fool even “seasoned” investors. It’s somewhat of a cry-wolf phenomenon. Eventually, investors become so weary from responding to false alarms that they become unresponsive.
The key is to resist the temptation to enter into this state of lethargy. Even if the market has you stumped, the dedicated and motivated enter into a phase of exploration. Remember, even in terms of development and technological breakthroughs, a lot takes place during a bear market. Some choose to harness and exploit the creative power of frustration, while others simply allow the frustration to get the better of them.
DeFi was birthed during the bear market of 2018 and had an enormous effect on the bull market of 2020 and 2021. Many projects rebranded and began exploring new ideas. It was during this time that the rather uncelebrated ETHLend became the now mighty DeFi behemoth, Aave. Similarly, Cryptoneurs are often forced to get creative during a bear market, and sometimes it can be a significant turning point in their journey.
When price appreciation is not on offer, and DeFi yields are skin and bone, it’s a clear sign to begin improvising. Such a dynamic can encourage the incorporation of additional arms to your “business”. This is why I enjoy trading this particular period of a market cycle. The market is pretty much stuck in a tight range, and yet there are relatively safe profits to be had. Provided, you can maximize the spikes during the sideways chop.
You Can’t Fight The Weather
The economic climate is very much like the natural climate. You have to dress accordingly. You can’t head out in a T-shirt and shorts during a blistering Winter. Similarly, as an investor, or trader, you have to meet the market where it’s at. The market is not going to change for you. Instead, you have to adapt to the market. This was addressed numerous times during 2022. Investors buying the dip were like rock climbers trying to ascend an avalanche.
There can be no progress, regardless of your conviction, or bullish stance. You have to adapt, to survive and eventually thrive. For me, I chose to exit many of my positions in 2021. I then chose to sell portions of my remaining bags during the pumps, and then repurchase more coins by repurchasing lower. This is a great strategy for increasing coin holdings and is significantly more powerful than staking.
However, not everyone is a trader. Either way, the obvious course of action was to avoid buying. This is the first and most practical starting point for navigating a bear market. If you are still buying during the initial stages of a bear market, you’ve got your shirt on back to front. The key is to adjust as soon as you discern that the “season” has changed. Then, it’s time to begin exploring alternative ideas.
Even if you choose to sit on your hands, eventually the frustration will get the better of you! Hopefully, this triggers creativity, as well as growth in other areas. You can still experience growth in other areas during a bear market. As we have discussed before, price appreciation is only one aspect when it comes to Crypto. This sector is rich in opportunity and has a lot to offer the pioneering and inquisitive mind.

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Final Thoughts
What I have chosen to do in previous bear markets has always come back to reward me in the bull markets that followed. No matter how bad it gets, provided I keep my head on straight, along with my thinking cap, things tend to work out in the long run. Once again, it’s the long game that counts. Even if my strategic approach incorporates a lot of “action” in the present, ultimately I am looking further down the line.
Another vital aspect to bear in mind is to never rely solely upon a single idea, opportunity, or strategy. Bear markets are also famous for actually destroying projects as well! Not everything survives. Once again, diversification is a shield and provides a level of comfort. I often think of those who had their entire life savings in BlockFi, Celsius, or Luna. It’s great when everything is going well.
However, the sun doesn’t shine forever. It’s important to remember that. To everything, there is a season and an “appointed” time. Learn to adjust, diversify, and allow bear markets to ignite your creativity, as opposed to becoming discontent. Stay strong! Catch you in the next one!

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Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.