In the cryptocurrency market (or any financial market), when the market is in a downturn (Bear Market), traders resort to different types of speculation to make profits or reduce losses. Here are the main types of speculation during a market downturn:
1. Short selling (Short Selling)
✅ Goal: Profit from price declines.
✅ Method: Sell a coin you do not own (using leverage), then buy it back later at a lower price.
✅ Example: You sell BTC at $60,000 expecting it to drop to $55,000, then you buy it back later and profit from the difference.
⚠️ Warning: Requires experience and strict risk management.
2. Quick speculation (Scalping)
✅ Goal: Achieve small profits from rapid price movements within a downtrend.
✅ Duration: Seconds to minutes.
✅ Suitable for: very active traders.
⚠️ Requires high focus and low trading costs.
3. Day trading (Intraday Trading)
✅ Open and close trades on the same day.
✅ Exploit market fluctuations within the same day (even if the overall trend is down).
✅ Relies on technical analysis and accurately identifying entry and exit points.
4. Bottom fishing
✅ Attempt to enter at the expected lowest price of a specific coin.
✅ Achieved through analyzing strong supports or oversold indicators.
⚠️ High risk: because it's difficult to time the bottom accurately.
5. Speculation on defensive coins (Defensive Coins)
✅ Such as stablecoins or those that decline less.
✅ Includes: BTC against small coins, or coins linked to strong projects.
✅ Used as a temporary hedge.
6. Speculation based on negative news (News-Based Shorting)
✅ Benefit from negative news or security breaches affecting a specific coin.
✅ Sell orders are placed immediately after the news, with strict risk management.
7. Speculation with classical technical analysis
✅ Exploit patterns such as:
Inverse head and shoulders
Descending channels
Continuation patterns of decline
✅ The trader enters at small bounce points or confirms a support break.
Important tips:
1. ✋ Do not enter without a stop loss.
2. 📉 Don't chase the market, wait for entry signals.
3. 🧠 Do not rely on emotions, stick to the plan.
4. 🔍 Monitor trading volumes to confirm trends.
