What to Do in a Crypto Bear Market? 8 Strategies to Apply

You will have heard about the bulls and bears of trading. If you are new to this space, it can be hard to remember which term means what. A simple way to remember it is that "bulls can run," which denotes a buoyant and active market, while a "bear can have a sore head," which denotes a weakening market.

Simply put, a crypto bear market is when a cryptocurrency market trades at 20% lower than their previous high mark for an extended period. Given that crypto prices are much more volatile than other financial assets, the 20% mark is important here. Before you take any action, be certain you are aware of the total picture. When a crypto bear market is brewing, early signals almost always show up on Bitcoin’s price movement. Other cryptocurrencies normally fall into line behind it.

Here are some keys to navigating a bear market, with explanations to come:

1. Stay Calm and Assess your Options.

2. Carefully Assess the Current State of the Market.

3. Avoid Leaving Your Crypto on Exchanges.

4. Don’t Try to Time the Bottom.

5. Look out for Dollar-Cost Averaging (DCA).

6. Avoid Shorting in a Crypto Bear Market.

7. Consider Staking.

8. Diversify Investments Across Various Crypto Assets.

Quick-but-Critical Definitions

Bear and bull markets apply to all forms of financial trading. The crypto market is young and developing and is giving new meaning to bear and bull markets as every phenomenon related to crypto is supercharged. The highs are higher, and, as we have seen from recent bear markets like the crypto winter of 2022, the lows are lower.

Bear Market: As we've said, this scenario is defined as a prolonged drop in asset prices, leading to your portfolio decreasing in value. In a bear market, asset supply is generally greater than demand because – and you see from where the name comes – the “bears” begin to sell losing assets before further price drops.

Bull Market: When asset prices are increasing over a prolonged period and your total portfolio increases, i.e., the opposite of a bear market. Confidence returns to the investors, and they return to buying, leading to a condition where prices rise, or are expected to rise.

Bull Vs. Bear market

Generally, investors are bullish, and many assets post positive returns on investment (ROI) in the long term, although many smaller cryptocurrencies never recover their losses. However, things change and that is why you are reading this.

As bull markets normally persist for a longer time period, it is easier for investors to return a profit. Navigating a bear market, while it is still possible to profit through shorting, is more difficult. So much depends on investor psychology and risk management, but there is more to be considered.

Crypto Winter

Before launching into our helpful guidelines, here is one more key term you need to know - “crypto winter.” This term has nothing to do with the time of year or the weather. This rather dark and apocalyptic term instead refers to a lengthy period – normally measured in months – during which most digital assets dip steeply in price. One such crypto winter came in 2018, when Bitcoin lost around 80% of its value from its December 2017 high, and many other cryptocurrencies fell even further. After rebounding and going on a bull run, the crypto market fell into another bear market in 2022, when Bitcoin lost more than 75% of its value from its November 2021 peak and many smaller coins lost far more. The next downturn came after a new record: Bitcoin closed at about $124,720 on 5 October 2025, then dropped to about $58,590 by 30 June 2026, a fall of roughly 53% (Coinbase prices, FRED, St. Louis Fed).

Eight Strategies to Employ in a Crypto Bear Market

Nobody buys into crypto expecting to weather a prolonged bear market. Most crypto investors are attracted to the high upside of the asset class and the promise of steep gains. Thus, it takes a mental adjustment to accept a crypto bear market when it comes around. To help you navigate the inevitable (every assets goes through up and down cycles) downturn in crypto assets, we have collated a list of the best actions available to you:

1. Stay calm and assess your options

Don’t panic and, as much as you are able, calmly consider where you are. This is crypto. Volatility should be baked into your trading plan. The absolute worst thing you can do is make rash decisions. Emotional decisions will come back to haunt you, particularly as a trader. Renowned American economist Benjamin Graham once said, “Individuals who cannot master their emotions are ill-suited to profit from the investment process.”

Begin by going back to ask yourself why you invested in crypto initially. Was it to make a quick buck by trading short-term or did you believe in crypto’s long-term possibilities? Did you want to be part of as many opportunities as you were able? The answer sets the stage for you moving forward out of the bear market, unscathed.

2. Carefully assess the current state of the market

In late 2022, after the collapse of the FTX exchange, Bitcoin fell below $17,000. Saying that out loud was scary to many because Bitcoin’s high, just a year earlier in November 2021, had been about $69,000. Bitcoin later recovered, first rose above $100,000 in December 2024 and reached a record daily close of about $124,720 on 5 October 2025. It then fell back to about $58,590 on 30 June 2026, roughly 53% below that record (Coinbase prices, FRED, St. Louis Fed). It is a market that is synonymous with bull and bear periods.

In a bear market, don’t be anxious about selling. As noted above, it is not easy to control your emotions during bear markets. Therefore, analyze why prices have fallen and dig deeper into the reasons. Develop your own solutions. Re-strategize before taking any action.

Take your time to research and learn about one or more of the cryptocurrencies. Always rely on credible sources and track the market regularly. As an investor, it is important to stay informed about crypto market trends and changes.

For investors with a higher understanding of technical analysis, i.e., predicting an asset’s price movements based on patterns, indicators and chart trends, there are indicators that can hint at when an asset may be near a bottom. One method is to track the asset’s moving averages to see whether the downtrend is losing strength. Another is the Relative Strength Index (RSI), which hints at whether a crypto is overbought or oversold. No indicator can confirm the bottom in advance.

3. Avoid leaving your crypto on exchanges

This advice applies to traders who own actual crypto, not to traders who have invested in crypto via contracts for difference (CFDs). While there is always a concern about keeping your cryptos on a custodial crypto exchange, the risk of losing them entirely increases significantly during a turbulent bear market. A sudden market crash could cause some/all crypto exchanges to become insolvent. This is not being said just to scare you; it is always a possibility. Therefore, opt for a non-custodial wallet app or – even better – a hardware wallet, where you have full control over your crypto holdings.

4. Don’t try to time the bottom

It is a fact of life that no one can accurately predict the bottom of a bear market. You can devote all your available time to research and analysis, and the best you can do is make an educated guess. Certainly, the more you study and analyze, the better your “guesses” become, and that is exactly what the experts do. However, one bad call and it could all be lost, which takes us back to the headline of this section: what you can do to ride out bear markets. Still, learn all you can in order to make your best moves, but do not put all of your holdings into that one “sure thing.”

5. DCA

An investment strategy commonly used during a bear market is Dollar-Cost Averaging (DCA). With this strategy, you continue to purchase small amounts of an asset over time, regardless of the price. A typical DCA schedule would have you invest $50 in Bitcoin each week rather than $200 all at once. Of course, you may change your DCA schedule as you see fit.

Hypothetical illustrative example by Arincen

6. Avoid shorting in a crypto bear market

Traders use shorting to profit from falling crypto prices. Normally, shorting is an ideal method for use when an asset hits an established support level, i.e., within the normal course of business. However, many experts do not favour this approach for Bitcoin or other cryptocurrencies because it could result in unlimited losses or even the liquidation of your position. This is a fundamental issue with shorting, and no amount of experience can prepare you for a market whose bottom is falling out.

Shorting is selling an asset at a high price with the intention of repurchasing it later at a low price. In practice, it involves borrowing a certain cryptocurrency at the current market price and selling it immediately. When prices fall, you purchase the same amount of crypto at a lower price and return it to the lender, profiting from the difference.

For example, when you purchase a crypto (going long), you can never really lose more than the amount of that investment. Thus, if you purchase Bitcoin for $1,000, the maximum you could lose is $1,000. By contrast, the potential gain is limitless (at least on paper). If you short Bitcoin for $1,000, the maximum you will gain from that trade is $1,000. However, if the crypto’s price begins to increase and the uptrend continues, your losses could pile up indefinitely. To make matters worse, if you short using margin, you must continue paying the interest charges, in addition to the original loss, for as long as you choose to keep your position open.

7. Consider staking

Staking is the practice of locking away your coins on a proof-of-stake (PoS) blockchain for a period of time and being rewarded for it. This may be a good way for you to earn a passive income from your crypto holdings, and it can reduce the emotional impact of a bear market. Many layer-one protocols allow staking native tokens on their networks for yield. However, staking has its own risks: your coins may be locked up while prices fall, rewards can be cut, and a staking platform can fail.

8. Diversify investments across various crypto assets

With thousands of cryptocurrencies on the market, no one can predict which one will rank highest or recover quickest, just as it is difficult to predict just how long the crypto bear market will continue.

You should investigate various cryptos to learn their all-time highs, overall performance, and roadmaps. A new roadmap announcement, which might include a new partnership or rebranding, just might be a major clue that crypto is on the up.

One approach to hedging your bets is to use DCA across a range of crypto assets, which may even involve further reducing trade sizes. Before making such a move, learn and understand all previous all-time highs and past performance, and how your chosen crypto fared in previous crashes.

Additional Investment Strategies for Bear Markets

Every trader’s situation is different. Make sure you cover your costs, i.e., living expenses, if you are trying to make it as a full time trader. If you are dependent on short-term market gains to pay the rent, you are not in a position to make sustainable choices as your portfolio value takes a dive.

Avoid volatility. If you are working through an investment house, consider moving a portion of your crypto holdings to gold, cash or some other stable asset.

Identify growing market segments. Some cryptos may hold up better during a severe market downturn if they are tied to market segments that are still growing, such as video games or fan-based NFT marketplaces, although such tokens can also fall sharply. These are worth evaluating, particularly if you already have specific knowledge about such market segments.

Look beyond price. Although a crypto’s price may drop in a bear market, there still may be advantages to owning some coins. Some funds earn fees from lending coins to a liquidity pool or staking them to a blockchain consensus network. Alternatively, you may want to hold onto crypto to preserve your position in the decentralized autonomous organization that sets policies. Although Bitcoin is a pure currency, more and more altcoins are tied to key technologies and can continue to deliver financial rewards.

Invest in derivatives. These are complex financial instruments that can be used to hedge risk or to profit when market prices decline. Crypto futures and options are becoming more widely available. They can let experienced investors profit from falling markets, but leverage means they can also cause large losses.

Conclusion

Even with market downturns, cryptocurrencies continue to advance with impressive speed. Many new projects emerge each month. Because of the volatility and other factors, crypto winter periods and bear markets will continue to occur. Keys to surviving crypto bear markets are positivity, patience, and a solid survival strategy that incorporates the tips noted here.