How to Survive and Thrive During The Crypto Bear Market

By johnwege | johnwege | 9 Sep 2022

If you have been interacting with the crypto markets during the last several months, you will likely have come to a certain conclusion. The mood in the market has completely changed, and people have begun doubting the actual future of crypto as well.  While it was once a foregone conclusion that we would definitely see newer all-time highs in the market, and eventually reach those fabled price predictions that we have all heard about.  Predictions that had Bitcoin reaching a price of hundreds of thousands of dollars per coin.  Ethereum being worth tens of thousands of dollars per coin.  Those optimistic days now feel like a forgotten memory and people have lost nearly all their conviction in what they previously thought they knew for a fact. It's this loss of conviction that allows people to be easily susceptible to market FUD and panic.  During the bear market, it seems like there is a daily onslaught of something wrong happening.  A combination of the price seemingly always going down, farther than we ever expected. The daily attacks or FUD being thrown towards the crypto market seem endless.  It truly can be a market that causes extreme anxiety and stress if you let it.  All of this can add up to be too much for people and they decide to sell out of their positions while they can still preserve some of their cash.

This all seems like a horrible situation, but I assure you that there is light at the end of this tunnel. If you can survive the bear market and continue building, while never taking your foot off the gas pedal towards accumulating.  Then, you will be able to change your life.  There is a thought in the crypto market that if you accumulate through 1 full cycle, including the bear and bull cycles.  You will be able to change your life financially.  But, if you can accumulate hard during two full cycles.  You'll be able to become wealthy.  4 years to change your life financially, and 8 years to become wealthy.  Unfortunately, most people aren't able to survive in this market that long while still keeping their conviction.  Today, let's talk about how you can survive in this market during the good times, but more importantly during the bad times.  If you're able to do it, years later you will look back at it as the best thing you ever did. The advice may be general and basic, but that doesn't diminish its importance.


1. Invest Only What You Can Afford to Lose


This may sound incredibly simple and just using common sense.  But, people should only invest what they can afford to lose.  For most, this is just a reasonable and responsible thing to do.  However, over the years that I have been investing in crypto, I have seen people have this problem time after time.  They are incredibly bullish about the crypto market and the future potential prices.  They want to invest as much as they can so that they can become rich as soon as possible.  This all sounds nice, and I'm sure that many of us have had these same types of thoughts as well.  Unfortunately, many people put ALL of their money into crypto.  Leaving next to nothing for their essential bills like rent, food, and others.  Some people will even go into debt to invest more into crypto.  Having the mindset that the price will eventually go up, and I will pay everything back when that happens.  And then the price keeps going down, which devastates the people who did this.  Not only did they lose most of their money, but they are also in debt and can't afford the essentials. This causes them to feel much more stress or anxiety while prices keep falling daily.  So much so that it may even start to affect their health.  Finally, they will decide they can't handle it anymore and will sell out of their position.  These same people will have large regrets when they see crypto prices begin to recover months later.

2. Avoid Leverage and Prioritize Safety

Another simple piece of advice, but during bear markets, people's main concern needs to be safety and preserving their crypto.  As we have seen during the summer.  When people or companies are using leverage, things can begin to go south very quickly.  Once they do, there is often a domino effect across the industry causing large-scale liquidations.  Prices can often become very volatile during bear markets. Up 10% one day, and down 15% the next.  This makes trading with leverage a dangerous game that should be avoided.  This is the time that taking self-custody of your crypto becomes even more vital.  So many of us were tempted by 3rd party lending services to receive that great passive income.  But, the market collapsed and so did many of these services.  Now people's funds are frozen on these services and may never see them again.  During this time learning the advantages of self-custody and learning how to do it will be key to you surviving unforeseen disasters during the bear market and also help you survive in the future as well.

3. Take a Step Back

Many of you who are reading this article probably would say that cryptocurrency is one of your biggest passions.  Chances are that on a daily basis, you are reading cryptocurrency-related articles, watching YouTube videos about crypto, and also listening to podcasts about it as well.  That doesn't even include the market research you're doing or how you're keeping up with the macro news that heavily affects the crypto market.  This daily onslaught of price drops, crypto FUD, and just overall negativity towards the market and its future can make anyone feel stressed or even depressed.  Which could lead to becoming burnt out and losing overall interest in the market.  Forgetting why you even had so much conviction in this market before and deciding to sell.  Personally, my greatest regret wouldn't be holding onto a coin too long, losing out on potential profits I could have had.  Instead, my greatest regret would be selling too early because I couldn't handle the market.  Only to watch prices go to the moon.  What this all means is that it's normal for the market to take a toll on you.  If that happens, it's perfectly fine to just take a step back, and take a break.  The market will still be here whenever you're ready to come back.

4. Dollar-Cost-Average


The classic advice of just setting weekly buy orders and buying without even thinking about it.  I would argue that this is one of the greatest things that you can do during a bear market to survive.  Not only will this allow you to get a great average buying price.  But more importantly, you won't even need to look at crypto prices or even think about it.  The weird thing in financial markets is that when prices are high, people pray for prices to drop so that they will be able to accumulate more.  But, once prices drop and then drop even further, they lose their conviction.  Often thinking that prices will drop even further, or they become too frightened to purchase.  Being able to buy without the stress of worrying about prices could be the best thing that will help you to survive this market.

5. Use Crypto as Your Unit of Account

This is something that helps me to re-focus my attention while we are in a market downturn.  While most people like to price their portfolios in dollars or your local currency.  The fact is this is what can cause a lot of stress as well.  Watching the value of your portfolio drop by thousands of dollars each day isn't something that everyone can handle.  That is often why you will hear bitcoiners say that 1 Bitcoin = 1 Bitcoin.  While the USD value of my portfolio may be dropping. In terms of BTC, my portfolio has never been higher.   You should also be using crypto as your unit account for your accumulation goals as well.  For many, maybe their initial goal is to accumulate $100,000 of crypto, or maybe even $1 million.  If you have reputable crypto assets like Bitcoin or Ethereum, I would argue that it is much better to set your accumulation goals with crypto as the unit of account.  Maybe your goal is to accumulate 1 full Bitcoin.  You also are striving to accumulate 10 full Ethereum.  Whatever your goal is, it is better to count in crypto.  This also makes earning income from crypto even more enjoyable.  While my monthly crypto earnings may be down in terms of dollars.  In terms of crypto, they have never been higher.

6. Recertify Your Conviction

During bull markets, it can be very easy to get caught up in the excitement of prices going parabolic on a seemingly daily basis.  That is something we do not see during a bear market.  Crypto during bear markets is sometimes flat-out boring.  This is a perfect time to study the market.  Learn the up-and-coming projects on the horizon.  Go down the rabbit hole on what are assuredly going to be big things in crypto such as DeFi, NFTs, and so on.  Learn how to make a passive income in crypto by staking, providing liquidity, or even lending.  While you should be very careful about that last option considering the last few months in the crypto market.  This is the time when you need to up your skills and grow your knowledge.  Learn why Bitcoin is so important.  Learn what makes Ethereum great.  Learn all of the terminologies that you need to have.  Doing all of these things could be the thing that makes you successful in the future.

6. Build the Portfolio

Now that we are in the bear market it is so much easier to be able to accumulate much larger amounts of Bitcoin, Ethereum, and other crypto.  Do you remember during the peak of the cycle, prices felt so expensive?  It had become difficult to build your portfolio.  At the market peak, investing $100 into Bitcoin or Ethereum would have only gotten you around 0.00144 BTC, or about 0.02 ETH.  If you were to that same $100 into these assets today, it would net you 0.00515 BTC or 0.0061 ETH.  As you can see, your cash is going a lot further today than it was only a handful of months ago.  Imagine if you were able to invest even larger amounts of cash.  Conviction isn't easy to maintain.  Some people never took their foot off of the gas pedal and kept accumulating extremely hard during the last bear market. I was one of them.  At times we were considered silly, or even crazy to be investing too much into the market.  When the bear market becomes serious, the ecosystem can become a very dark place.  Having optimism of any kind is seen as a silly thing.  Those who can persevere during these difficult times are often the ones who are rewarded the most.  But, it isn't an easy process.

7. Get Involved 

My last piece of advice is to get involved in the cryptocurrency ecosystem.  This could mean becoming active on places like Publish0x, Reddit forums, crypto Twitter, Discord, and the list goes on.  The key thing is that you build comradery with other people in the market.  As I have mentioned before, while prices are dropping and our portfolios are losing thousands of dollars.  The market can become a dark, lonely and stressful place.  Being able to share that experience with others, and maybe even begin to joke about it can work wonders.  This will help to be able to remember why you became so interested in crypto and maintain your conviction in it as well.  A pain that is shared is much easier than a pain that is felt alone.  So get involved, and you may even make some friends along the way.

There you have it.  Those are my seven tips to be able to not only survive the bear market but also thrive.  I believe that this cycle or the next one after that might be our last giant chance to make a fortune with crypto.  Our last chance to partake in that large transfer of wealth that we are always hearing about. That it could be the last time before prices settle down and begin to act more like traditional markets.  If that is the case, it is even more important that we survive this bear market.

How about you? What advice do you have to help survive the bear market?

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