It’s no secret that the cryptocurrency market is very volatile and this leads to frequent changes in the market trend. Crypto investors need to understand which trend dominates in the market since it determines which strategy they will use in their trading. Due to understanding crypto market trends, traders can avoid losses of funds and make better investment decisions. One of the market trends which can prevent traders from getting returns is the bear market.
However, experienced traders can short cryptocurrencies to get a profit during the falling price. Such a strategy is very dangerous for investors, as it carries certain risks, and a trader may incur losses. Thus, it is crucial to know when a bearish trend is coming or when it changes. But not all traders have enough experience in cryptocurrency trading, and not everyone knows how to make money on a downtrend. Therefore, algorithmic tools can help a trader who has no experience in this field of activity. Such tools are significantly simplifying the whole process of trading during a bear market. That’s why we have decided to provide you with a guide about what the bear market is and which algorithmic tools to use on the Cryptorobotics trading platform.
What does a bear market mean?
A bear market is a period when the value of a digital asset is constantly declining. When the price of a digital asset is falling, many traders hurry up to leave the crypto market. They prefer to stay in cash or fix profits from their long positions. Despite traders having the opportunity to earn money during the falling prices, it is not a good idea for newbies as bear markets can lead to losses and make the trading process more difficult.
The contradictory meaning is a bull market. The bull market occurs when the prices of cryptocurrency are rising in the market. Let’s take a closer look at the differences between bear and bull markets.
Differences
| Bear market | Bull market |
|---|---|
| Falling prices | Rising prices |
| Traders short cryptocurrency | Traders long cryptocurrency |
| Negative market sentiment | Positive market sentiment |
How to trade the bear market?
There are several ways to trade during a bear market. However, there is no consensus as to which of them are better and which are worse as every trader acts by virtue of his knowledge and experience. Here are three examples of how traders can invest in cryptocurrency when a bearish market trend comes:
- Staying in stablecoins or cash.
- Shorting crypto.
- Entering a long position on a bounce. This kind of investment is also known as a “bear market rally” or a “dead cat bounce”.
How to trade on the Cryptorobotics platform during the bearish market?
As we have already said, the bear market can bring enormous losses, and all traders have to be aware of the crypto market trends. Beginners can face challenges during a bear market. Even expert traders can suffer losses. Thus, the Cryptorobotics team has created different algorithmic tools for traders to minimize the risks and increase the chances of getting a profit.
All tools are very easy to set up, and even beginners can handle and start trading.
In order to start algorithmic trading, you should sign up for this platform and select “Algotrading”. After that, you will be able to select the most suitable option for your cryptocurrency trading.
There are several algorithmic functions you can use when bear markets come:
Crypto trading bots
On the Cryptorobotics trading platform, you can use two types of crypto trading bots that allow people to enter the trades 24/7 during the bear market:
Crypto Future
This type of bot is capable of trading in the bear market and bull market. It is divided into three types which differ in the level of risk management and the number of crypto pairs.
Bearish Power
This bot enters the trades according to traders’ set up indicators on several timeframes to provide information about potentially reversing the market trend. In that way, the bot starts the trading process without a signal affirming the trend. Instead, it uses statistical extreme values for starting crypto trades. This bot is able to enter long and short positions.
Copytrading
Copy trading is a tool intended for a user to copy the trading strategies of a professional trader and tracks the results of the execution of his trades.
If you want to launch copying trades of an expert trader, you should follow these steps:
- Select a channel of the master trader.
- Subscribe to a channel.
- Use the same digital coin as the experienced trader.
- The amount of your balance must also be the same or more than the minimum balance mentioned in the channel.
- Start the Copytrading.
It is worth noting that the Copytrading function is available on Binance and Binance Futures.
Autofollowing
Autofollowing is a completely automatic function that makes a crypto trading process straightforward. This function operates in the following way: the analyst gives signals, and the bot follows them and enters the trades automatically.
In addition, you can subscribe to AI Columbus Futures Channel that utilizes Artificial Intelligence algorithms to predict the cost of cryptocurrency for every hour. This system is capable of giving a signal now or waiting for a more profitable market trend.
To subscribe to this channel, you should:
- Choose Algotrading.
- Press the Autofollowing.
- Select AI Columbus Futures Channel.
Signal Trading
Signal Trading is a tool designed to purchase or sell cryptocurrency according to experienced analysts’ forecasts. The analyst gives you signals that provide you with information about profitable trading opportunities. The bot processes these signals and enters the trades. Trading signals can suit beginners and help them find out their own strategies. Moreover, this tool is not only created to get a profit but help save traders’ funds.
Besides, you are allowed to set up additional functions like:
- Stop Loss, Take Profit, and Trailing.
- Market, Limit, and stop-limit orders
- Alerts
Conclusion
Surely, a bear market carries certain risks and can lead to losses. However, this market trend does not last forever, so traders need to learn to recognize it and choose the right trading strategies. Traders can also use algorithmic tools to trade when prices are falling. But before using them, it is necessary to study their functionality in order to make sure that they are really intended for crypto trading when it is a downtrend.
