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3 ways to trade Bitcoin and altcoins during a bear market

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3 ways to trade Bitcoin and altcoins during a bear market

Markets are scary right now, and while the situation is likely to worsen, it doesn’t mean investors need to sit out and watch from the sidelines. In fact, history has proven that one of the best times to buy Bitcoin (BTC) is when no one is talking about Bitcoin.

Remember the 2018–2020 crypto winter? I do. Hardly anyone, including mainstream media, was talking about crypto in a positive or negative way. It was during this time of prolonged downtrend and lengthy sideways chop that smart investors were accumulating in preparation for the next bull trend.

Of course, nobody knew “when” this parabolic advance would take place, but the example is purely meant to illustrate that crypto might be in a crab market, but there are still great strategies for investing in Bitcoin.

Let’s take a look at three.

Accumulation via dollar-cost averaging

It’s helpful to be price agnostic when it comes to investing in assets over the long term. A price agnostic investor is immune to fluctuations in value and will identify a few assets that they believe in and continue to add to the positions. If the project has good fundamentals, a strong, active use case and a healthy network, it makes more sense to just dollar-cost average (DCA) into a position.

Take, for example, this chart from DCA.BTC.

Results of weekly dollar cost averaging into Bitcoin. Source: DCA.BTC

Investors who auto-purchased $50 in BTC weekly over a two-year span are still in profit today, and by DCA, there is no need to make trades, watch charts, or subject oneself to the emotional stress that is associated with trading.

Trade the trend and go long off extreme lows

Aside from steady, reasonably sized dollar-cost averaging, investors should be building a war chest of dry powder and just sitting on their hands waiting for generational buying opportunities. Entering the market when it’s deeply oversold and all metrics are in extreme is typically a good place to open spot longs but with less than 20% of one’s dry powder.

When assets and price indicators are two or more standard deviations away from the norm, it’s time to start looking around. Some traders zoom out to a three-day or weekly time frame to see when assets correct to higher time frame support levels or previous all-time highs as a sign to invest.

200-week moving average heatmap for Bitcoin. Source: LookIntoBitcoin

Others look for price to flip key moving averages like the 118 DMA, 200 WMA and 200 DMA back to support. On-chain fanatics typically follow the Puell Multiple, MVRV Score, Bitcoin Pi indicator or Realized Price indicator to see when extreme multi-year lows are hit as a sign of when to buy.

Either way, opening spot longs during extreme sell-offs usually turns out to be a good swing trade or even entry point for a multi-year-long position.

Related: Wen moon? Probably not soon: Why Bitcoin traders should make friends with the trend

Do nothing, until the trend changes

Trading during a bear market is hard, and capital and portfolio preservation are the top priorities. For this reason, it’s best for some investors to just wait for confirmation of a trend change. As the saying goes, “the trend is your friend.” Everyone is a genius and a superb trader during a bull market, so if that was you, then wait for the next bull trend to roll around and go be a happy-go-lucky genius then.

Downtrends, consolidation and bear markets are notorious for chopping up traders and reducing one’s portfolio size, so it’s unwise to trade against the trend unless one has a PNL positive method for trading during bear trends and some skill at shorting.

For crypto investors, it’s important not to live in a vacuum and keep an eye on the equities markets. Crypto traders have a tendency to only focus on crypto markets, and this is a mistake because equities markets and BTC and Ether (ETH) prices have shown a strong correlation in the past two years. In one’s charting suite of choice, it would be wise to keep the S&P 500, Dow Jones or Nasdaq charts up alongside BTC’s or ETH’s daily chart.

Bitcoin correlation to equities markets. Source: TheBlock

In the most recent trend reversal, BTC’s price action was the canary in the coal mine that began to chirp louder and louder as the United States Federal Reserve amplified its intent to raise interest rates. It is easy to be misled by the minuscule moves that occur in Bitcoin’s four-hour and daily price charts, and one could easily be lured into some hefty positions based on the belief that BTC is on the verge of a reversal.

Keeping an eye on the market structure and price action of the largest equities indexes will provide crucial insight into the strength and duration of any bullish or bearish trend that Bitcoin might exhibit.

This newsletter was written by Big Smokey, the author of The Humble Pontificator Substack and resident newsletter author at Cointelegraph. Each Friday, Big Smokey will write market insights, trending how-tos, analyses and early-bird research on potential emerging trends within the crypto market.

Disclaimer. Cointelegraph does not endorse any content of product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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4 On-Chain Metrics Show the Bitcoin Price Is Primed for Bullish Explosion

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4 On-Chain Metrics Show the Bitcoin Price Is Primed for Bullish Explosion

Amid recent macroeconomic extremes, Bitcoin has maintained a quiet stance, almost eerie for its HODLers. Nonetheless, its hashrate and accumulation are soaring — what could this mean for its price?

Bitcoin has been consolidating in a narrow range between $18,800 and $20,200 since the mid-Sept price fall. In volatile markets like cryptocurrency, similar quiet periods of consolidation are rare. 

Recent Glassnode findings show that the current BTC price action resembles both pre-crash November 2018 and pre-rally March 2019. Despite price downturns, mining and accumulation statistics are improving. Let’s look into what this means for the health of the network.

Bitcoin hashrate makes new ATH 

Last week, the Bitcoin hashrate made a new all-time high of 242 exahashes per second.

Source: Glassnode

In the chart below, we can see that Bitcoin’s longer-term, slower hash ribbon was once again overtaken by the faster ribbon, indicating improved mining conditions in late August. Since the price saw no major uptick during this time, the rise in hashrate was likely due to more efficient mining hardware and more mining rigs working in general.

Source: Glassnode

Historically, these hash ribbon moving average swaps precede price gains. Historically, when the hash-rate drops and subsequently recovers, major BTC price bottoms have been made. 

Is a price bottom in?

Apart from the hashrate, Bitcoin accumulation levels also reached a 7-year high. CryptoQuant data shows that 6-month-old and older Bitcoins now make up 74% of the realized cap. During the 2019 and 2015 bottoms, this score sat at 70% and 77%, respectively.

Source: CryptoQuant 

Lastly, for the first time in this cycle, the percentage of supply in loss has reached the 50% level.

CryptoQuant data shows that the price bottoms during previous cycles normally occur when the percentage of supply in loss reaches 50% or more.

Source: CryptoQuant

The current data shows the highest percentage of losses at 52% on the daily chart, 50.4% on the weekly (7DMA), and 48% on the monthly (30DMA). 

While quite a few metrics suggest that BTC should be near a bottom, the overall momentum will likely still depend on macroeconomic conditions as well as its correlation with the Nasdaq and S&P 500. 

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Bitcoin price sees first October spike above $20K as daily gains hit 5%

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Bitcoin price sees first October spike above $20K as daily gains hit 5%

BTC price action sees a new October peak amid a declining U.S. dollar and a successful prior day’s trading for U.S. equities.

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Bitcoin price sees first October spike above K as daily gains hit 5%

Bitcoin (BTC) saw its first trip above $20,000 on Oct. 4 as traders expected familiar resistance to cap gains.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Multi-week dollar lows fuel Bitcoin bulls

Data from Cointelegraph Markets Pro and TradingView showed BTC/United States dollar climbing prior to the Wall Street open, up over 5% in 24 hours.

The pair had shaken off macroeconomic concerns at the start of the week, with trouble at Credit Suisse and the escalating Russia-Ukraine conflict failing to slow performance.

Now, the short-term analysis focused on a run potentially topping out closer to $21,000 — as was the case late last month, as sell-side pressure at that level remained significant.

“20500-21000 is a sell zone. If price gets there, which should, don’t be too bullish,” popular trader Il Capo of Crypto told Twitter followers on the day.

Razzoorn, an analyst at international trade group The Birb Nest, noted that the current charge was Bitcoin’s fifth attempt at escaping a major liquidity cloud in several weeks.

Despite the potentially limited upside opportunity, Bitcoin rallied in line with a broader risk asset tide which saw United States equities finish noticeably higher the day prior.

At the same time, the U.S. dollar suffered, the U.S. dollar index (DXY) extending losses to approach 111 points and threaten support in place since mid-September.

U.S. dollar index (DXY) 1-day candle chart. Source: TradingView

“Up the market goes,” a more optimistic Michaël van de Poppe, CEO and founder of trading platform Eight, continued:

“Flipping $19,500 for support. Now, if range-high at $19,600 holds for Bitcoin, I assume we’ll continue towards $22,400.”

Altcoins attempt to change sticky trend

Across major altcoins, it was Ether (ETH) and Ripple (XRP) leading daily performance at the time of writing. 

Related: CoinShares’ Butterfill suggests ’continued hesitancy’ among investors

ETH/USD traded above $1,350, still yet to break out of its sideways trend in place for several weeks since major losses entered during the post-Merge breakdown.

ETH/USD 1-day candle chart (Binance). Source: TradingView

XRP, on the other hand, faced a more stubborn band of resistance after prior gains, bouncing off multi-week support just below $0.45.

XRP/USD 1-day candle chart (Binance). Source: TradingView

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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McDonald’s starts to accept Bitcoin and Tether in Swiss town

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McDonald’s starts to accept Bitcoin and Tether in Swiss town

The global fast food chain is among the first to participate in a crypto-friendly experiment in the town of Lugano.

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McDonald’s starts to accept Bitcoin and Tether in Swiss town

Multinational fast food chain McDonald’s started to accept Bitcoin (BTC) as a payment method in the 63,000-populated city of Lugano in Italian Switzerland, which is becoming a hotspot for crypto adoption in Western Europe. 

A one-minute video of ordering food on McDonald’s digital kiosk and then paying for it at the regular register with the help of a mobile app was uploaded on Twitter by Bitcoin Magazine on Oct. 3. The Tether (USDT)  logo could be spotted next to the Bitcoin symbol on the credit cash machine, which is not surprising, as in March 2022 the city of Lugano announced it would accept Bitcoin, Tether and the LVGA token as a legal tender.

On March 3, 2022, the city signed a memorandum of understanding with Tether Operations Limited, launching the so-called “Plan B.” According to this plan, Tether has created two funds — the first one is a $106 million, or 100 million Swiss francs, investment pool for crypto startups, and the second is around $3 million, or 3 million Swiss francs, attempt to encourage the adoption of crypto for shops and businesses across the city.

In addition to allowing Lugano residents to pay their taxes using crypto, the project will extend payments to parking tickets, public services and tuition fees for students. More than 200 shops and businesses in the area are also expected to accept crypto payments for goods and services.

Related: Swiss Post’s banking arm developing in-house crypto custody platform

Speaking to Cointelegraph in June, Paolo Ardoino, chief technology officer of Tether and Bitfinex, claimed that Plan B “is going great,” announcing a two-week educational activity on blockchain and cryptocurrencies in the city.

In September 2021 El Salvador became the first country in the world to allow using Bitcoin as a legal tender. Since that time, McDonald’s has been accepting Bitcoin at all its 19 outlets in the country.

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