I’m not saying it’s a crypto bear market … but if it were, here are the 3 opportunities… before we dive in, let us get into the right mindshare.

Meme of this week’s blog post is be an enjoyoooor…

The reality of crypto market play is well expressed in a tweet from Winklevoss…

The first time Bitcoin actually gained value was on October 12, 2009 when Martti Malmi, a Finnish developer that helped Satoshi work on Bitcoin, sold 5050 Bitcoins for $5.02. This gave 1 Bitcoin the value of $0.0009. Read this alongside crypto adoption rate. By the end of 2021, an estimated 114 million accounts hold Bitcoin worldwide, according to crypto.com.

Take a note of the following two developments

1. Bitcoin price rose from $0.0009 to >$68,000 (over the past 12+ years)
2. Crypto adoption has a potential to grow from 114 million to 2.4 billion (in the next 12+ years)

One more thing, since 2011, Bitcoin has seen on average, 200% per year (in due course Bitcoin has died 441 times; Read more: Bitcoin Obituaries – “Bitcoin is Dead” Declared 400+ Times)

What, are you still thinking on whether to own crypto or not? If not you, instributions are ready for the scoop. Retailers fear factor is institutions greed when it comes to accumulating bitcoin. The following chart shows the organizations owining an upside of $500+ million worth of bitcoin (fluctuates based on price).

What is funny is, with Bitcoin price hovering at the same level at present vs the same time period last year, the fear & greed index just reversed. This happened amisdt the bitcoin and crypto hit more main stream adoption and lots of development activity in progress. Isn’t it bit irrational?

Meanwhile, a metric referred to as Bitcoin’s “dormancy flow” is flashing a historically bullish signal. The flow measures the number of days since a token was last sold — called Coin Days Destroyed — and puts it in the context of the total market capitalization of the token.

Glassnode assessment of spending behavior is Entity-Adjusted Dormancy Flow, which compares the Bitcoin market cap (asset valuation) to the annualized dollar value of coin Dormancy (spending motive). Dormancy is the average age (in days) of spent coins per unit of BTC, which is akin to an Average Spent Output Lifespan weighted by volume.

• High values of Dormancy Flow means network value is high relative to the yearly value of realized Dormancy in USD. The interpretation is that the bull market is in “healthy” conditions (spending in concert with demand valuation).
• Low Dormancy Flow values indicate moments where market cap is undervalued relative to the yearly sum of realized Dormancy, indicating moments where Bitcoin is a value price.

Entity-Adjusted Dormancy Flow recently bottomed out, showing a full reset of the metric. These events historically print at cyclical bottoms, and confluence with Hodler Net Position Change and the VDD Multiple hint at a potential floor of spending in the near-term, barring new surprises.

With the above charts in tow, we can largely identify market conditions typically seen in the late stages of a macro bearish trend, often around capitulation style events.

It remains to be seen whether there is more pain to the downside, perhaps in response to macro/monetary headwinds, or whether the majority of the damage has already been done and a bullish relief rally is due.

Enough of my attempt to create positivity on crypto markets. What if we hit the crypto bear market again?

What Is Better Plan of Action If We Hit Crypto Bear Market Again?

I first heard about Bitcoin in 2013 and stayed away. When Silk Road got shut down to Mt. Gox blowing itself up, I strongly felt this was a scam and money created for illegal stuff. But curiosity made me to continue follow the asset and it was a fun learning as the market turned bearish in 2014. Like many, I first owned bitcoin in 2017and sold all as the market crashed again in early 2018. As I stick around during the bear cycle, I had my best learning curve in 2018, 2019 and 2020. We all know what happenned in 2020 DeFi summer and bitcoin appreciation after the last halving . I strongly encourage all of you to stick around in 2022 if it turns out to be a bearish year. Though even if it doesn’t, if you want to “make it” with crypto, it requires a lot more effort than just throwing some money at a few tokens and hoping for the best.

I see there are 3 opportunities exist in every bull or crypto bear market. Here are they,

1) Financial Opportunities

During crypto bear market everything is quieter, the pace of the ecosystem is slower and it’s much easier to focus on what really matters. This is because the only people who stick around in bear markets are the true believers and builders that actually want to create something of long-term lasting value instead of speculating on random tokens. And because the ecosystem is much quieter, these people get a lot more attention on their work and it’s much easier for them to build a lasting community that helps to grow the product or service. In turn, some of these projects end up being incredible investment opportunities because the market is underpricing them relative to their traction.

On that note – from a pure investment standpointm – if we look back at 2019 you’ll see just how insanely profitable it was to stick around and bet on the right teams. Of course, there was ETH that you could’ve bought between $100 & $300 for most of 2019, then there was LEND (Aave’s token before the conversion) that you could’ve scooped up when its market cap was $10 million (it’s $2.6 billion today) and of course if you were an early liquidity provider of Uniswap, you probably would’ve recieved a 6-7 figure UNI airdrop. As you can see, there are plenty of lucrative opportunties when things are quiet because the market tends to underprice certain tokens in a bear market (just like it overprices many of them in a bull market).

Another way to look at is finding a better investment space. Player-to-Player (PVP) vs Player-to-Environment (PVE) opportunitues. PVP gets no net new money. Find ecosystems that offer PVE and lot of upside. In the current environmnet, alternatives L1s like Fantom, Harmony and Near are offering better PVE opportunities. In crypro bear markets and/or slowdown periods, scount for better PVE opportunitues.

2) Social Opportunities

Outside of financial opportunity, there’s also social/career opportunity – it’s much easier to build yourself up when you’re not competing with as many people as before. Though it all depends what you’re interested in doing and where you want to focus your efforts. I was always interested in educating myself and people around me so that’s why I put a lot of effort into writing blog posts. Subscribe to the newesletter Crypto Exponnentials, that offer curated intelligence based on “Fundamental + Technical + OnChain” Analysis.“Crypto Alpha Straight To Your Inbox”. If you’re interested in working as something like a developer for a DeFi team then the pool of applicants will probably be much lower in a bear market which will mean less competition for each role (and a higher chance for you to get it).

3) Educational Opportunities

By ensuring you are properly informed and well-equipped to spot and act on potentially lucrative trading opportunities, you’ll stand the best chance of success in both a bull and bear market. 

Some of the more useful things you may want to brush up on might include:

• Technical analysis: to identify market patterns that indicate a good entry/exit point;
• Fundamental analysis: to spot undervalued projects with long-term growth potential;
• Sentiment analysis: to understand the general tone, fear, and hype in the market;
• Risk management: to learn how to manage your risks, budget and diversify your investments;
• Trading strategy: research and test various trading strategies to be competent enough to deal with more opportunities.

To Sum It Up

The best thing you can do for yourself during both crypto bull and crypto bear market is to make sure you just simply survive and don’t blow yourself up. I’ve seen plenty of people over the years lose most of the wealth they’ve accumulated by using leverage, over-trading, gambling on random coins and falling for scams. I think the main reason this happens is that it can be rather easy to make some quick money in crypto (especially during bull markets) which leads people to believe that they are much better investors than they actually are. This then leads them to make poor investment decisions all in the name of getting another big win which results in overtrading which then leads to losses.

Anyway, I hope that many of you stick around for the long-term just as I plan to do. I think it’s critically important to understand and worth repeating – especially during times of bearish price action. I really do mean it when I say that sticking around in times like this can change your life – but you do need to put in the work and make your own luck.

Have a great weekend everyone!

Related Reading: The Bitcoin Reality Check In Macro Economic View

Disclaimer: Past performance is not indicative of future results, you could lose some or all of your money. Buying/selling digital currencies is extremely volatile and may not be suitable for all people as the price can change drastically in a short amount of time. Never risk more than you are 100% comfortable losing. Anyone wishing to buy/sell digital currencies should seek his or her own independent financial or professional advice.

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