How To Thrive In A Crypto Market Downturn aka Bear Market

Aug 18, 2022

Author: Elle Miller

Whatever you’d like to call it…. major downturn, bear market, crypto winter…. when the bull market turns it’s brutal, especially for newbies who have only ever known the sweet taste of a bull market …but you know what, even the most battle hardened veterans get anxious when the inevitable comes.  

The last crypto bear market, starting in 2018, destroyed many because no matter how well you do during a bull market or how obvious it is that it’s only temporary, seeing your investments dwindle is gut wrenching. Your instinct is to go through your portfolio and try to minimise your losses - even though it’s not technically a loss. This leads to people making fear-based decisions such as snap selling (often at a huge loss) to try to stem a perceived “bleed”.   

We really need to change the way we look at bear markets to see them more as an opportunity to take the time to step back and get re-orientated, get educated, get into new tokens/projects very cost effectively (it’s like a massive retail sale but for crypto!), do some dollar cost averaging into more of what you are already holding. Bear markets are the closest things we have to a time machine - taking us back to bargain prices. After all, they say it’s a bull market that can make you money but it’s the bear market that can make you generationally wealthy. 

The only way out of a bear market is through it….. but how do I get “through it’ I hear you ask. Well let’s have a talk about it because I got through the 2018 bear market when my crypto portfolio went from around $100k down to around $10k. This is how I did it….

1.Understand the bear cycle.

  • The more you know about bear markets the better - you’ll know what to expect and you’ll be less likely to be blindsided by panic! You’ll also learn to understand it’s a natural part of the boom bust cycle - especially applicable to an emerging space like crypto.
  • Every type of investing space actually has bull and bear markets - but the more established the space the less pronounced they are (unless something really crazy happens!). In short, a bear market is when prices fall and confidence is low and fear is high - and a bull market is when prices go up and confidence is high and fear is low. 
  • The predictions we try to make of how those cycles will look (like the image below) are based on how we saw the previous cycles play out. Looking at the past 4 bear cycles in crypto gives us a good picture of what to expect but future events are not 100% dictated by past events. 
  • As crypto grows and becomes more “mainstream” the highs and lows of bear and bull markets will flatten out - and we’ve already seen some of this happening each cycle. Bull cycles will go less parabolic and bear markets will not be as severe.
  • It is expected that this current bear market cycle may not last as long, or be as violent, as the past bear markets. 
  • This is our first bear market with Decentralised Finance (DeFi) and it’s thought that this area of crypto could change the course of a bear market. DeFi can deliver gains even in a bear market and this is attractive to investors who would normally be sitting around doing not much of anything. 
  • This is also our first bear market with the Metaverse and Gaming crypto spaces. These spaces only just managed to emerge in the bull market and are still in their infancy, however, they could still sway the way a bear market pans out. Both of these spaces will still operate in a bear market - people still want to play games and participate in virtual worlds regardless of what the investing environment looks like.
  • Be aware that there will be a bunch of fear being perpetuated by the media and traditional financial institutions trying in vain to derail crypto as a technology and alternative to mainstream finance. Also, you’ll see people will be genuinely panicking because they don’t understand what is happening, or they are overcommitted or they are just plain scared. Then there will certainly be people in your immediate circle who don’t believe in crypto and they might even say “I told you so”. Not helpful!
  • Try not to get sucked into the negativity because what I can tell you is every crypto bear market we’ve ever had has morphed back into a bull market. Every. Single. One. Remember that.


2.Don’t give in to your emotions. 

  • Loss is difficult and the thought of it can lead us to do silly things. Remember, it’s a paper loss unless you sell. 
  • Bear market blues is a thing… if it’s getting too much then step away from your portfolio, take a break, focus on other things outside of crypto. 
  • Make sure any decisions you do make are based on rational logical thinking. Talk over your decisions with somebody else if you can - to sanity check your thinking.
  • Also, very prevalent in a bear market are “get rich quick schemes” and phishing activities. Unscrupulous people are tapped into a bear market psyche, they know investors are worried and they know investors are potentially sitting on a “loss” position. Scammers will try to manipulate our emotions and offer amazing opportunities so that we will sign up to try to claw that money back some other way. Don’t be fooled! 
  • If you find anything like this that you do want to get involved in and you are a part of our Breakout Solutions “Digital Wealth Collective” community you can swing it by the team first for vetting. If you are not part of the Breakout Solutions community you can get involved for free (and get access to a wealth of information) as part of our Decrypting Crypto Program.

3.Plan and strategise. 

  • We should always be expecting downturns and bear markets in crypto - the sector is in its infancy so expect lots of ups and downs! Having such a wild market makes it easier to make big money - but also easier to lose big money if you don’t play it right. 
  • This is why it’s prudent to take profit (if you make any) and set it aside to buy when the dips occur - or take it out of crypto totally and set it aside as your “buffer”. 
  • When a bear market, or even a downturn, does come about it’s a good idea to look at what you have and what your aims are. Do you have any spare cash waiting on the side to invest? If not, are you going to sell down any profit you do still have to have some cash to invest if the market goes further down? Are you just going to hang on to what you have? 
  • Look at what you are invested in and shed what you think may not survive the bear market i.e. are you currently invested in projects that have good fundamentals? These are the ones most likely to survive the bear market and come back stronger in the next bull market. 
  • Come up with a plan for how you want to handle the bear market. Run it by someone else if you can as it helps to talk to someone who can help you make sure you are staying rational with your way forward. 

4.Cut any projects that do look dicey. 

  • There’s a difference between holding the line with your fundamentally sound investments - and unduly hanging on to projects that are likely not to make it through long term, those pump and dumps or meme coin projects. These are the types of “losses” that we do sometimes need to make decisions on incurring, especially as the bear market comes upon us. 
  • If you want help spotting and avoiding rubbish projects/tokens and scams you can access free education as part of our Decrypting Crypto Program.
  • If there’s anything you are invested in that you are not sure is a wise thing to take into the depths of a bear market then be sure to discuss this with someone who may know the market better than you - - so you can workshop it through rationally.

5.Watch your reactions

  • It’s good to be flexible in order to keep up with what’s going on through a bull or bear market - and you should always make sure you “act” and don’t “react”. Knee jerk reactions are not helpful… evaluating your plan and tweaking it if you need to is helpful.

6.Talk about it! 

  • If you are finding things overwhelming or the market conditions are getting you down or you don’t understand what you should be doing… talk to other people (invested in crypto) about it. We are all in the same boat and the best thing is within the Breakout Solutions community there are many people who have successfully gotten through a bear market… talk to us and continue to stay engaged with us - we can help you learn, keep your spirits up and look for opportunities that will flourish in the next upcycle. 
  • Be sure to join our “Decrypting Crypto” Telegram group here if you’d like a space to be able to talk to fellow crypto investors.
  • If you want to get access to the free Decrypting Crypto platform, education, training and the exclusive members community you can sign up here:
  • In a bear market it’s so important to find the people that are looking beyond their fear of loss, taking advantage of the bargains, bunkering down and prepping for the next bull market. These are the people that you will want to surround yourself with because these are the people who will become your “support group” and assist you to navigate through the rough times.

7.Get educated - you have time now! 

  • Relax, take a breath, the bull market was probably very hectic for you. Take this time to take stock of what you are doing, what you still need to learn, get things in order.
  • You have a chance to gather all of your thoughts in a slower “bear” environment. Not to mention this is also a prime opportunity to thoroughly research the space and find people who are doing great things in a bear market. 
  • It’s a great time to get educated. Use the slower pace to find out more about the crypto space in general. Watch videos, attend webinars, read through materials… get as much information on board as you can.
  • It’s also important to learn about things that are likely to come into their own in the next upturn/bull market like NFTS, Metaverse, Gaming etc. These things only just emerged recently and are likely to gain more traction in the next upturn. 
  • If you want to get access to the latest crypto information, courses and expert opinions across a range of different topics sign up to the free Decrypting Crypto platform here:

8.Be ready….

  • ‘You don’t have to get ready if you stay ready’…. this is particularly true for a bear market. There’s another bull market coming. Some say a bull market could make its beginning signals as early as mid to late 2023. Make sure you are ready - think about what you want your position to be going into that bull market and plan for what you have to do to get ready for that. 
  • If you want to get notified of when might be a good time to start taking advantage of the next bull run, register your interest here for our ‘Buy Signal Reminders’.


  • If you are really finding it difficult and you’ve tried all of the above and nothing is working then just simply step away. Leave what you can ticking along and take a break (at least stop looking at the price charts!). Nothing is worth destroying your mental health over. 
  • This is what I did some of during that last bear market - I focused a lot on non-crypto things and left everything as is. It wasn’t for mental health reasons, it was more that I didn’t understand what I should be doing in a bear market. I could have definitely used the time better. 
  • Also, a mistake I made was I didn’t stay engaged enough and I missed the signals for when the bear was ending and the bull was starting. Unfortunately, I missed out on some amazing opportunities right at the beginning of the bull market. 
  • If you do step away then try not to go too far for too long! Check in every now and then, when you can.

Whilst nothing is impossible, crypto or the blockchain industry just dying off or not recovering from a bear market would be highly unlikely - and it’s never happened before, we’ve come out of 4 bear markets so far! Also, the crypto industry, especially this bull cycle, has experienced unprecedented retail, institutional, and government (in many countries) adoption and support and this bodes well for it to continue to be adopted into mainstream for the foreseeable future.  

Remember, you’ve chosen to be invested in crypto for a reason. We are all here as early adopters of this emerging technology because we can see the potential that crypto, the blockchain etc have. Being a pioneer is a risk for sure and it’s never smooth sailing. If it was easy then every Tom, Dick and Harriet would be doing it and then our opportunities to build generational wealth would not be as prevalent. It’s all about staying the course and using this “down time” to prepare for the next bull cycle… it’s coming…. and those who are prepared for it will be handsomely rewarded.