Mindset Chapter: Survival Principles in a Bear Market

The cryptocurrency market experiences drastic fluctuations between bull and bear phases, and mindset is the core weapon to navigate these cycles, especially in a bear market where 90% of losses stem from emotional turmoil.

Respect the Market, Acknowledge Ignorance

In a bear market, avoid the “bottom-fishing belief”; the market bottom is often determined by macro liquidity (such as Federal Reserve policies) rather than technical indicators.

Case Study: After the collapse of LUNA in 2022, many investors fell victim a second time due to the mindset of “having dropped 90% must rebound.”

“Counterintuitive” Discipline

The cryptocurrency market is highly volatile, and emotional trading is the greatest enemy.

Bear Market Strategy: Avoid “FOMO bottom-fishing,” patiently wait for right-side signals (such as weekly level breakouts, volume recovery).

Bull Market Strategy: Restrain “greed chasing,” take profits in batches (for example, sell 10%-20% of the position every time it rises by 20%).

Long-Term Thinking vs Short-Term Noise

The market spends 90% of its time in consolidation and 10% completing trend breakouts. In a bear market, minimize ineffective actions and focus on key market hotspots and on-chain data.

Core Formula for Risk Management

Single loss ≤ 2% of total capital, avoid systemic risk through position control (such as below 1x leverage) and stop-loss discipline (hard stop-loss + technical support level as double insurance).

Cash is King, Wait for Certain Opportunities

Keep at least 50% in stablecoins (USDT/USDC) to cope with extreme market conditions, avoiding “being fully invested and trapped.”

Dollar-Cost Averaging Strategy: Gradually build positions only when BTC drops to key support levels (such as 50%-60% of the previous bull market peak).

Use of Hedging Tools: Utilize options protection (such as buying put options to hedge position risk).

Arbitrage Opportunities: Pay attention to price differences between exchanges, contract funding rates (short arbitrage when rates are negative).

Focus on Resilient Assets

BTC: The characteristics of the big coin in this round need no further explanation.

Additionally:

In a bear market, focus on internal growth; in a bull market, execution matters. The current market requires a defensive mindset to participate in offensive trends. Remember: Risk control is always more important than returns; having enough ammunition allows you to take the initiative in a true bull market rally.