{"id":90743,"date":"2025-08-23T15:59:51","date_gmt":"2025-08-23T15:59:51","guid":{"rendered":"https:\/\/mycryptomania.com\/?p=90743"},"modified":"2025-08-23T15:59:51","modified_gmt":"2025-08-23T15:59:51","slug":"what-the-smart-money-does-during-bear-markets-and-you-should-too","status":"publish","type":"post","link":"https:\/\/mycryptomania.com\/?p=90743","title":{"rendered":"What the Smart Money Does During Bear Markets (And You Should Too)"},"content":{"rendered":"

Image<\/a><\/p>\n

Most traders hate bear markets. Prices are tanking, portfolios are bleeding red, and every news headline seems to predict an even darker future. But here\u2019s the thing\u200a\u2014\u200athe \u201csmart money\u201d doesn\u2019t see bear markets as something to fear. They see them as an opportunity. In fact, some of the biggest fortunes in crypto are made during<\/em> bear markets, not during the bull runs everyone brags\u00a0about.<\/p>\n

I learned this the hard way. My first bear market felt like a slow, painful bleed. I panic-sold coins that would later recover tenfold, jumped into random \u201crecovery\u201d projects that failed, and convinced myself I was done with crypto altogether. It wasn\u2019t until I started studying what veteran traders, hedge funds, and early adopters were actually doing<\/em> in bear markets that my perspective flipped.<\/p>\n

Today, I want to share exactly what I learned\u200a\u2014\u200athe habits, strategies, and mental frameworks that the smart money uses when the market is down, and how you can adapt them for yourself.<\/p>\n

They Hold Cash and Stablecoins Like a\u00a0Weapon<\/h3>\n

When you\u2019re in a bull market, it\u2019s easy to think cash is useless. Everything\u2019s going up, so why sit on the sidelines? But the smart money treats cash (and stablecoins) as dry powder\u200a\u2014\u200aa weapon to deploy when fear grips the\u00a0market.<\/p>\n

In a bear market, prices don\u2019t just dip\u200a\u2014\u200athey get discounted<\/em>. Projects that were overpriced hype-fests suddenly become affordable. That\u2019s when having liquidity gives you an edge. While most retail traders are trapped in losing positions, the smart money can scoop up quality assets at a fraction of their true\u00a0value.<\/p>\n

I started keeping at least 20\u201330% of my portfolio in USDT or USDC during uncertain times. This wasn\u2019t about timing the exact bottom\u200a\u2014\u200ano one can do that consistently. It was about always having the ability to buy when others are forced to\u00a0sell.<\/p>\n

They Double Down on\u00a0Research<\/h3>\n

Bear markets filter out the noise. When prices are high, every project looks like the next big thing. When the market\u2019s down, the pretenders get exposed, and only the real builders\u00a0remain.<\/p>\n

The smart money spends bear markets digging deep\u00a0into:<\/p>\n

Founding teams\u200a\u2014\u200aAre they still active and transparent, or have they gone\u00a0quiet?Roadmaps\u200a\u2014\u200aAre they shipping updates even when hype is\u00a0gone?Tokenomics\u200a\u2014\u200aIs the supply structure sustainable long-term?Community engagement\u200a\u2014\u200aIs there still activity, or has everyone moved\u00a0on?<\/p>\n

I used to chase projects based on influencer hype and social media buzz. Now, my bear market watchlist is built on fundamentals. That\u2019s how I found gems that later exploded when the market turned bullish\u00a0again.<\/p>\n

They Accumulate in Ranges, Not All at\u00a0Once<\/h3>\n

Another key lesson I learned from watching experienced traders: they don\u2019t try to catch the bottom with one big buy. Instead, they use dollar-cost averaging (DCA) to accumulate over\u00a0time.<\/p>\n

The logic is simple\u200a\u2014\u200ano one can perfectly time market bottoms. But by spreading out purchases, you average into a strong position without betting everything on one price\u00a0point.<\/p>\n

During the last bear cycle, I started buying one of my favorite altcoins at $0.40. I bought more at $0.35, $0.32, and even $0.28. By the time the bull market returned, my average entry price was so low that even a modest recovery gave me massive\u00a0upside.<\/p>\n

They Focus on Building, Not Just\u00a0Buying<\/h3>\n

One thing that shocked me when I started paying attention to the smart money crowd is how much time they spend building<\/em> during bear markets. This doesn\u2019t necessarily mean starting a new blockchain project\u200a\u2014\u200athough some do. It can\u00a0mean:<\/p>\n

Creating content in the\u00a0spaceNetworking with developers and investorsLearning new skills like coding smart contractsSetting up trading systems and\u00a0bots<\/p>\n

Bear markets are quieter, which means there\u2019s more time to prepare for the chaos of the next bull run. I used one downturn to finally master DeFi yield farming\u200a\u2014\u200aa skill that paid off big when things heated up\u00a0again.<\/p>\n

They Diversify Beyond Just\u00a0Coins<\/h3>\n

Smart money investors see bear markets as a chance to rebalance and diversify. Instead of going all-in on tokens, they look\u00a0at:<\/p>\n

NFTs (blue-chip collections with long-term potential)Blockchain infrastructure projectsDeFi protocols with real\u00a0revenueCrypto-related stocks and\u00a0ETFs<\/p>\n

The idea is to spread risk while staying positioned in the overall blockchain ecosystem. When one sector recovers faster than others, you\u2019re already in the\u00a0game.<\/p>\n

They Study Past\u00a0Cycles<\/h3>\n

Every bear market feels like \u201cthe end of crypto\u201d\u200a\u2014\u200auntil the next bull run comes along and everyone forgets the fear. The smart money studies past cycles to recognize patterns:<\/p>\n

Bitcoin dominance often rises as traders flee\u00a0altcoinsQuality projects keep building\u00a0quietlySentiment reaches peak pessimism right before the market\u00a0turns<\/p>\n

In 2018, Ethereum dropped from over $1,300 to around $80. By 2021, it was back above $4,000. History doesn\u2019t repeat perfectly, but it often\u00a0rhymes.<\/p>\n

They Avoid Emotional Trading<\/h3>\n

This might be the hardest one. When your portfolio is down 70%, every instinct tells you to act\u200a\u2014\u200ato sell, to chase a pump, to \u201cmake it back\u201d quickly. The smart money avoids this trap by having a plan before<\/em> emotions kick\u00a0in.<\/p>\n

I now set clear buy ranges, stop-losses, and profit-taking targets before entering any trade. In a bear market, discipline matters more than\u00a0hype.<\/p>\n

They Network With Other Smart Investors<\/h3>\n

In bear markets, the loudest voices tend to disappear. But the serious players\u200a\u2014\u200athe ones with long-term vision\u200a\u2014\u200akeep talking, sharing, and collaborating.<\/p>\n

The smart money surrounds itself with other informed, level-headed traders. These aren\u2019t Telegram pump groups. They\u2019re smaller circles where ideas, research, and strategies are exchanged without the noise of retail\u00a0FOMO.<\/p>\n

During one bear market, I connected with a trader who introduced me to a low-cap project I\u2019d never heard of. I started accumulating early, and by the next bull run, it had grown over 15x. That never would have happened if I wasn\u2019t networking.<\/p>\n

They Take Profits Strategically\u200a\u2014\u200aEven in a Downtrend<\/h3>\n

Not every bear market trade needs to be held for years. The smart money knows there are mini-cycles within the larger trend. A project might pump 40% in a week even if the overall market is\u00a0down.<\/p>\n

I\u2019ve learned to take partial profits on these short-term moves. It keeps my portfolio healthier and my mindset clearer\u200a\u2014\u200aand it ensures I\u2019m never fully dependent on a moonshot to\u00a0recover.<\/p>\n

They Prepare Mentally for the Next Bull\u00a0Run<\/h3>\n

When prices are down, it\u2019s easy to forget how crazy things get during a bull run. The smart money uses the quiet time to\u00a0prepare:<\/p>\n

Setting exit targets for\u00a0holdingsDeciding how much they\u2019ll cash out when certain price points\u00a0hitPlanning diversification into other\u00a0assets<\/p>\n

This way, when the market turns euphoric again, they\u2019re selling into strength\u200a\u2014\u200anot buying the\u00a0top.<\/p>\n

Final Thoughts<\/h3>\n

Bear markets are where the real opportunities are. The smart money knows that fear creates discounts, research creates confidence, and patience creates\u00a0wealth.<\/p>\n

If you can train yourself to think like they do\u200a\u2014\u200ato see red markets as a chance to position yourself for the future\u200a\u2014\u200ayou\u2019ll not only survive the downturns, you\u2019ll thrive when the next wave\u00a0comes.<\/p>\n

The next time the market takes a hit, remember: this is the time to get strategic, get disciplined, and get\u00a0ready.<\/p>\n

What the Smart Money Does During Bear Markets (And You Should Too)<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":"

Image Most traders hate bear markets. Prices are tanking, portfolios are bleeding red, and every news headline seems to predict an even darker future. But here\u2019s the thing\u200a\u2014\u200athe \u201csmart money\u201d doesn\u2019t see bear markets as something to fear. They see them as an opportunity. In fact, some of the biggest fortunes in crypto are made […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-90743","post","type-post","status-publish","format-standard","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/90743"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=90743"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/90743\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=90743"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=90743"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=90743"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}