The cryptocurrency market is down by 0.5% in the past 24 hours, with its total cap dipping to $891 billion overnight. This level represents a 2.3% rise in the last seven days, yet the market remains down by 15% in a month, by 31% in the past six months, and by 62.6% in a year.
However, while bearish conditions mean that the chances of easy and big gains are significantly diminished, traders and analysts have increasingly been offering tips to their followers on how to survive the crypto bear market. From spreading risk/opportunity across a diversified portfolio to dollar-cost averaging, they decrease the chances of the average trader losing during the downturn, while also increasing their potential for upside when conditions improve.
Diversification
Diversification is applicable during bull and bear markets, so it’s always advisable for traders who want to spread their risk and potential rewards.
Of course, the interpretation of ‘diversification’ varies from one trader to another. For some, it means having a considerably wide spread of different cryptocurrencies (and other assets) in their portfolio, while for others, it means simply avoiding putting all their money in a single coin.
CNBC’s Ran Neuner recently gave an example of a portfolio worth $1,500, which was spread across 15 different cryptocurrencies. Including Bitcoin (BTC), Ethereum (ETH), and Arweave (AR), it operated on the principle of allocating more money to the fundamentally strongest coins, while also ensuring a good balance across the various sub-sectors of the cryptocurrency market.
While many investors may not wish to complicate things by having 15 separate trades on the go at the same time, the basic principle is sound. That’s because bear markets tend to hit some coins harder than others, making it difficult to judge which will emerge into an eventual bull market more strongly, and which may languish.
Dollar-Cost Averaging
One of the perennial questions which gets asked again and again during a bear market is, ‘Have we hit the bottom?‘ This is especially true of the 2022 crypto bear market, which upon falling to an apparent bottom, has fallen to yet another bottom, and so on.
The point here is that, especially during uncertain periods, traders can never really be sure when the market has hit bottom. Something similar applies to tops during bull markets, since, in the latter scenario, a collective sense of euphoria tends to make at least some traders believe that the good times will continue indefinitely.
As such, the savvy, long-term investor should consider adopting a dollar-cost averaging strategy. What this involves is buying a small amount of a certain cryptocurrency (or several cryptocurrencies) over regular intervals, such as $100 of Bitcoin per month instead of $1200 all at once.
Doing this averages out falls and rises, meaning that traders can worry less about whether they’ve perfectly timed their entry into a market.
Presales
Presales may not be the first thing that comes to the average trader’s mind when they think of bear market strategies. However, as with the two tips above, allocating at least some money to a spread of promising presales can be a way of minimizing risk while maximizing potential upside.
And what’s interesting is that, even during 2022’s crypto bear market, some of the most notable presales have led to substantial gains following listings. For example, early investors in the Tamadoge (TAMA) sale from September saw the new altcoin rise by as much as 1,800% compared to its sale price in October, when it listed on OKX.
Of course, not every presale token is going to rise by this much when listing for the first time. Nonetheless, by carefully studying the current sales and considering the fundamentals (as well as the team) of each corresponding coin, investors can usually acquire a reliable sense of how successful a presale might be.
For the sake of example, here are three promising presales happening right now, with each coin involved boasting strong roadmaps.
Dash 2 Trade (D2T)
Dash 2 Trade is an Ethereum-based trading intelligence platform that provides real-time analytics and social trading data, helping investors of all experience levels make more informed trading decisions. It’s set to go live early next year, with its D2T token being used to pay for the monthly subscription fees on the platform.
Dash 2 Trade’s presale has already raised more than $7.7 million and is about to enter its 4th and final stage very soon. It has also announced listings on BitMart and LBANK Exchange for early next year, giving early investors a good opportunity to make some decent returns.
RobotEra (TARO) is a Sandbox-style Metaverse that will enable gamers to play as robots and create its virtual world, including NFT-based land, buildings, and other in-game items. Due to launch in an alpha version in the first quarter of next year, it will also enable players to connect with other metaverses, in the process creating a multi-verse where NFTs from different platforms can interoperate.
1 TARO is currently selling for 0.020 USDT (it can be bought using either USDT or ETH), although this price will rise to $0.025 in the second stage of its presale.
Calvaria (RIA) is a game in which players can collect, trade, and battle with NFT-based cards. It will include various play-to-earn features, yet it will also enable users to play it without holding any cryptocurrency, something which could make it more popular than other blockchain-based titles.
RIA will be used within its ecosystem for purchasing in-game items and for staking, giving it a strong use case. The presale for the token has raised $2.1 million and is currently in its fifth stage, with 1 USDT buying 30.77 RIA.
The market is currently in a news-driven environment where the prices of cryptocurrencies have been determined by news agenda rather than fundamentals.
Bitfinex analysts have warned crypto investors to be cautious as bitcoin’s (BTC) recovery over the weekend is not a sign that its correction is over; the asset could witness more bloodshed in the near term.
In the latest Bitfinex Alpha report, experts deemed the market’s reaction this week critical, especially as supply alleviated over the weekend could return when traditional markets open.
“No Man’s Land”
Since Saturday, bitcoin has risen almost 10% from $57,600 to $63,000, closing last week in the green. The asset has surged above the 125-day range low of $60,200, which it broke through earlier this month after news of the German government’s massive BTC selling hit the market.
Market sentiment began to improve after reports that wallets linked to the German government were almost empty. However, the positive sentiment may not be sustained for long as the BTC the German authorities moved to trading desks and exchanges are yet to be sold.
While the supply from Germany appears to have been factored into bitcoin’s market price, Bitfinex analysts believe the end of selling pressure depends on how the involved trading desks execute their trades in the coming days.
Although the shift in sentiment underscores the market’s capacity to integrate new information and adjust expectations quickly, analysts think the market’s reaction over the first two trading days of the week cannot be overlooked for two reasons.
First, the low support level in the $60,200 range has now become a potential resistance line. Second, trading patterns over the past three months suggest that weekends are usually favorable for markets, especially on Saturdays when supply pressure seems to subside.
“We are now in no man’s land until we get clear resolution above or below this level,” the analysts said.
A News-Driven Environment
Besides the potential resistance level and three-month weekend trading pattern, the market is currently in a news-driven environment, where the prices of cryptocurrencies have been determined by news agendas rather than fundamentals.
Since selling pressure concerns are not yet completely obsolete due to upcoming Mt Gox creditor distributions, Bitfinex analysts expect such headlines to continue to have some impact on price movements. As such, the analysts urged investors to exercise caution in their trading strategies.
BlackRock’s IBIT led with $117.25 million in inflows on July 15, also being the most traded Bitcoin ETF.
The US spot Bitcoin ETFs recorded a daily net inflow of $301 million on July 15th. This extended their winning streak to seven consecutive days amidst a broader market recovery.
None of the ETFs recorded outflows for the day.
Bitcoin ETFs Rake in $16.11B in Net Inflows Since Jan
According to the data compiled by SoSoValue, BlackRock’s IBIT, the top spot Bitcoin ETF by net asset value, recorded the largest net inflows of the day at $117.25 million. IBIT was also the most actively traded Bitcoin ETF on Monday, with a volume of $1.24 billion. Ark Invest and 21Shares’ ARKB came in close behind with net inflows of $117.19 million.
Fidelity’s FBTC experienced net inflows of $36.15 million on Monday, while Bitwise’s BITB saw $15.24 million in inflows. VanEck’s HODL, Invesco and Galaxy Digital’s BTCO, and Franklin Templeton’s EZBC funds also recorded net inflows. Meanwhile, Grayscale’s GBTC and other ETFs, such as Valkyrie’s BRRR, WisdomTree’s BTCW, and Hashdex’s DEFI, registered no flows for the day.
A total of $2.26 billion was traded on Monday. The trading volume for these ETFs was less than in March when it exceeded $8 billion on some days. Meanwhile, these funds have collectively attracted $16.11 billion in net inflow since their January launch.
What’s Next For Bitcoin?
Earlier this month, bitcoin’s price decline was mainly due to fears of massive selling pressure from Mt. Gox and the German government’s BTC sales.
But the assassination attempt on pro-crypto former US President and presumptive Republican candidate Donald Trump at Saturday’s rally seemed to spark a recovery in the world’s largest digital asset, and experts are bullish on the asset’s price trajectory going forward. Bitcoin surged more than 9% over the past week and was currently trading slightly below $64,000.
Veteran trader Peter Brandt discussed bitcoin’s price outlook, suggesting a potential major rally. He referred to a pattern he terms “Hump->Slump->Bump->Dump->Pump” and highlighted that the July 5 double top attempt was a bear trap, confirmed by the July 13 close. He sees a likely continued upward trend but warned that a close below $56,000 would negate this bullish view.
“Bitcoin $BTC could be unfolding its often-repeated Hump…Slump…Bump…Dump…Pump chart construction. Jul 5 attempt at the double top was a bear trap, confirmed by Jul 13 close. Most likely scenario now is that bears are trapped. Close below $56k negates this interpretation”
PeckShield alert reveals LI.FI’s protocol vulnerability is similar to a March 2022 attack, with the same bug recurring.
The decentralized finance (DeFi) platform LI.FI protocol has suffered an exploit amounting to over $8 million.
Cyvers Alerts reported detecting suspicious transactions within the LI.FI cross-chain transaction aggregator.
LI.FI Issues Warning After $8 Million Exploit
LI.FI confirmed the breach in a statement on July 16 via X: “Please do not interact with any http://LI.FI powered applications for now! We’re investigating a potential exploit.” The team clarified that users who did not set infinite approval are not at risk, emphasizing that only those who manually set infinite approvals seem to be affected.
According to Cyvers Alerts, more than $8 million in user funds have been stolen, with the majority being stablecoins. According to on-chain data, the hacker’s wallet holds 1,715 Ether (ETH) valued at $5.8 million and USDC, USDT, and DAI stablecoins.
Cyvers Alerts advised users to revoke relevant authorizations immediately, noting that the attacker is actively converting USDC and USDT into ETH.
Crypto security firm Decurity provided insights into the exploit, stating that it involves the LI.FI bridge. “The root cause is a possibility of an arbitrary call with user-controlled data via depositToGasZipERC20() in GasZipFacet, which was deployed 5 days ago,” Decurity explained on X.
“In general, the risks behind routers, cross-chain swaps, etc. are about token approvals. Raw native assets like (unwrapped) ETH are safe from these kinds of hacks b/c they don’t have approvals as an option. Most users & wallets also no longer do “infinite approvals” which gives a smart contract total control on removing any amount of their tokens. It’s important to understand which tokens you’re approving to which contracts.
This dashboard looks for all transactions of a user that intersects Lifi. Not all of these transactions indicate risk- but you can see how, broadly, integrations & layers of tech (like how Metamask bridge uses Lifi on BSC) can complicate how users do or don’t put their assets at risk. Revoke Cash is the most well known approval manager app.
But it’s also good security practice to simply rotate your address. New addresses start with 0 approvals, so starting fresh by moving your tokens to a fresh address is another good security practice.” – commented Carlos Mercado, Data Scientist at Flipside Crypto.
Recent Exploit Mirrors March 2022 Attack
Further analysis by PeckShield alert revealed that the vulnerability is similar to a previous attack on LI.FI’s protocol that occurred on March 20, 2022. That incident saw a bad actor exploit LI.FI’s smart contract, specifically the swapping feature, before bridging.
The attacker manipulated the system to call token contracts directly within their contract’s context, making users who had given infinite approval vulnerable. This exploit resulted in the theft of approximately 205 ETH from 29 wallets, affecting tokens such as USDC, MATIC, RPL, GNO, USDT, MVI, AUDIO, AAVE, JRT, and DAI.
“The bug is basically the same. Are we learning anything from the past lesson(s)?” PeckShield Alert said in a July 16 X post.
Following the 2022 incident, LI.FI disabled all swap methods in its smart contract and worked on developing a fix to prevent future vulnerabilities. However, the recurrence of a similar exploit raises concerns about the platform’s security measures and whether adequate steps were taken to address the vulnerabilities identified in the previous breach.
LI.FI is a liquidity aggregation protocol that allows users to trade across various blockchains, venues, and bridges.
