How to Invest in a Falling Market: Top 3 Main Rules to Know in 2023

The current drop in the crypto market is the largest since 2018. Inexperienced market users will ask themselves what to do now and how not to lose their funds. Buying cryptocurrency in a falling market is a very difficult matter in terms of willpower and decision-making. However, theoretically, such a solution can bring large profits. Here are 3 tips on how to invest in a falling market so as not to lose all your funds.

#1 Never Invest Money That You Can Not Afford to Lose

The crypto market has gone into one of the strongest and deepest recessions of all time. The price of bitcoin has almost reached the $20,000 mark, and the second most popular coin Ethereum has dropped to almost $1,000. Therefore, all traders and people familiar with cryptocurrency are divided into two camps: those who buy while the price of assets is low and those who avoid investing because the market can go into a much larger drawdown. An inexperienced investor needs to understand a number of rules to manage their deposit properly.

The first rule of an investor, especially during a falling market, is to buy cryptocurrency exclusively with your own money, which you are not afraid to lose.

An inexperienced investor should not take loans, sell apartments and borrow money to have time to buy bitcoin at $20,000. These are huge risks that a beginner may not be able to handle. It is possible and even necessary to buy cryptocurrency in a falling market, but only for the free amount of money that you are not afraid to lose in the event of a bad scenario.

#2 Invest Money in Crypto Gradually

In the event that you fully comply with rule #1, you can resort to rule #2. It is worth buying cryptocurrency in a falling market, not a growing one. Although it is psychologically very difficult, investing in a growing market is wrong from a financial point of view. When the market rises, there is a risk that you will buy an asset at its highest price and get big financial losses. 

Thus, the bearish trend is the best time to buy all leading cryptocurrencies at bargain prices. If you’re wondering where to buy some crypto, you should definitely think about doing it at Switchere. On our platform, you have an opportunity to buy all leading cryptocurrencies in the fastest and most convenient ways using any available payment method. Moreover, we offer some surprising bonuses! Users of our platform enjoy a 0% service fee for the first order.

In a falling market, there is a high risk that the asset could go even lower. And, for example, after buying a bitcoin at $20,000, it will be frustrating to see a price of $10,000 for one bitcoin in a month.

That is why it is essential to buy assets in a falling market gradually. Let’s say you have $10,000. Divide the amount into 5 or 10 parts. And buy an asset as its price goes down. If bitcoin goes even lower, you can buy it on the drawdown, thus, adjusting the average purchase price.

Read Next: Best Ways to Survive a Crypto Bear Market & Crypto Winter

#3 Be Prepared for Long-Term Investments

The last rule complements tip #2. Do not sell a reliable asset if it is in a strong decline. Do not be afraid and immediately fix -100%, -200%, or even -500%. In six months, a year or two, bitcoin and other popular crypto assets will still grow, and you will get your profit.

Of course, you will have to turn into a long-term investor. And if you bought bitcoin for $20,000 and it dropped to $10,000, you will lose a lot of money if you sell it now. But if you wait a certain time, you can go to zero or profit. That is why, when buying assets, especially in a risky falling market, be prepared for long-term investments. This is what was discussed in rule #1.

If you can afford to hold a certain amount from six months to several years and then get up to 300% plus, you should gradually buy a cryptocurrency, such as bitcoin, in a falling market. If you may not have enough money to even live on, there is no need to enter such a risky crypto market.

It is also necessary to mention that this rule does not apply to unpopular altcoins, many of which are simply a scam and when they fall, they will never grow back. In this case, your money is lost. Therefore, inexperienced users should first invest only in the most reliable assets. Such as, for example, bitcoin and ether. But remember that they can theoretically also lead to a complete loss of funds.

Read Next: How to Build a Crypto Portfolio: Key Steps to Know in 2022


This information is provided for informational purposes only. Such information is not intended as and may not be relied upon as trading advice. Before deciding to trade cryptocurrencies, you should carefully consider your objectives, level of experience, and risk appetite. Please do your own research and due diligence on the services provided by online cryptocurrency trading platforms.

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