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Is investing in a bear market in crypto a good idea? Situation as of June 27

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investing in a bear market in crypto a good idea

Is investing in a bear market in crypto a good idea? Experts told about the dangers of investing in digital assets during a bear market and named some projects to watch out for

Everyone understands what causes a bear market in crypto. This is due to current world events. Cryptocurrency investing is a risky business. Even at a time when the market is growing steadily, there are plenty of dangers faced by their owners. Now that the market has entered a bearish phase and analysts are predicting even greater declines, cryptocurrency investments pose more and more risks.

Investors consider less risky products or take wait-and-see positions. However, even during the correction and the bear market, there are projects that may be interesting. What are the dangers of investing in altcoins in a downtrend? Tokens to watch out for.

A bankrupt portfolio in the longest bear market in crypto

Even with proper risk management, high-risk strategies are good for growth markets, but hardly justified in periods of recession and turbulence. The situation with Celsius and other major crypto platforms highlights the need for prudent risk management and careful project selection.

The crypto market may also have been affected by macroeconomic conditions, not just the problems of Celsius and 3AC. Against the backdrop of tighter Fed policies and even just expectations of a key rate hike, many investors are trying to get rid of high-risk assets. In such an environment, the liquidity of many tokens is decreasing, making their prices more sensitive to “whale” selling.

While some tokens may seem interesting in the short term (e.g., Avalanche), it is worth looking at the portfolios of large cryptocurrency companies that have crashed, such as Three Arrows Capital. But be aware that buying anything on this list is a bad idea.

Rare exceptions

Right now, on the bitcoin chart, the upper and lower limits of price fluctuations form a large wedge that could end with a bullish rise to the $26-27k level. If that happens, many altcoins could skyrocket by tens or even hundreds of percent.

Of interest are the coins of the decentralized exchanges DYDX, UNI, 1INCH. Large volumes have come in and large investors are likely hoping for growth in these tokens, Podolyan said. The whales on UNI (Uniswap native coin) have been especially strong, buying nearly $100 million worth of tokens in a short time.

The cryptocurrency waves is also worth a look. This altcoin can lag behind the main market, but then “shoot up” very strongly while the whole market “cools down”.

Waiting position

The cryptocurrency market is in a complete bearish trend. Any price impulse in such a situation should only be considered for finding an entry point for a short position or for profit taking.

Since mid-June, bitcoin has been in a “price channel” – a structure on the chart that often marks some pause before further movement within the global trend, in this case a downtrend. The condition for the cryptocurrency to continue falling is the exit from the upper boundary, the collection of liquidity, and the following return. After that, quotations head to the lower boundary and go further to the lower targets. The nearest bitcoin targets are $19.0k and $17.4k.

Negative sentiment in the global market also plays an important role: investors are looking for salvation from recessionary risks in the rising U.S. dollar, the specialist explained. Only the U.S., despite the problems in the economy, can offer stability and rising interest rates.

In the current situation it is extremely risky to buy coins. Now it is better to take a wait-and-see attitude or not to buy anything but BTC and ETH, because they are the only coins that can survive a bear market, which may last for the next two years.

Now you know how to make money in a bear market crypto. But remember that all investment decisions must be balanced.

Cryptocurrency

Ethereum’s Network Activity Heats Up with a 10% Increase in Active Addresses

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After a worrying start to the month, Ethereum finally showed signs of recovery as April progressed. The altcoin climbed to nearly $1,830 a few days ago before facing a small correction.

In the backdrop of this uptrend, the Ethereum network fundamentals appear to be heating up.

Active Addresses Surge

CryptoQuant’s latest analysis stated that Ethereum’s active addresses increased from 306,211 to 336,366 within just two days, an almost 10% jump. This surge, coupled with a rise in the price of Ether, indicated heightened network activity and growing interest in the blockchain.

This recent uptick is seen as a positive indicator for Ethereum, especially given its role as the foundation for many major blockchain projects. With Ether being a cornerstone of the broader altcoin ecosystem, any significant price movement in ETH is likely to influence the entire market.

As Ethereum continues to grow, the momentum may spark further growth across decentralized applications and projects built on the network.

“Final thought: Since Ether is the most important token in the Altcoin ecosystem, what would happen if its price explodes? The answer: very likely, the entire ecosystem would move with it.”

Institutional Offloading of Ethereum

With regards to Ethereum’s cost basis distribution, there is a significant concentration of supply around the price level of $1,895, where approximately 1.64 million ETH is held. This concentration indicates a key overhead resistance point, as many holders at this price level were last active in November 2024, during the crypto asset’s rally.

At that time, these investors purchased ETH, driving their cost basis higher. This suggests that as ETH approached this price range earlier this week, it faced selling pressure from these holders who sought to break even or secure profits.

As selling pressure mounts around this price level, it coincides with a broader trend of institutional offloading. For instance, Galaxy Digital transferred 65,600 ETH, worth $105.5 million, to Binance, which was a noticeable decline in its Ether holdings from about 98,000 ETH in February to 68,000 ETH, as tracked by Arkham.

Ethereum funds also faced significant outflows. Meanwhile, CoinShares reported $26.7 million in outflows last week, which pushed the total outflows to $772 million over the last two months. Despite these outflows, the altcoin has seen positive net inflows of $215 million year-to-date.

Galaxy Digital is not the only entity that has cut its Ether position. In fact, Paradigm has also reduced its exposure, as it transferred 5,500 ETH ($8.66 million) to Anchorage Digital on April 22nd.

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Bitcoin (BTC) Shows Resilience as It Strengthens and Decouples from Stock Markets

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Bitcoin has gained significant momentum over the past week, surging 10% against the US dollar after a relatively quiet and often painful spring. After recently hitting two-month high, the world’s leading cryptocurrency appears to be setting its sights on a new all-time high, and this signals a potential new phase for the asset.

Experts point to several factors contributing to Bitcoin’s resurgence.

Bitcoin’s Decoupling Cycle

According to CryptoQuant’s latest analysis, the weakening of the US dollar, which has historically shown an inverse correlation, is a factor. As the dollar drops, Bitcoin typically strengthens, a trend that seems to be playing out once again.

Another potential catalyst for BTC’s rise is the ongoing geopolitical situation. Market uncertainties, particularly due to trade tariffs imposed by the Trump administration, have recently shown signs of de-escalation. Reports indicate that the tariffs, which have weighed on markets, could be moderated as political leverage shifts.

In addition, talks surrounding a possible peace deal in Ukraine have sparked optimism. Should these negotiations result in a resolution, high-risk assets like cryptocurrencies could benefit significantly.

Perhaps the most significant trend in Bitcoin’s performance is its decoupling from traditional markets. Over the past seven days, Bitcoin has notably separated from both the S&P 500 and Nasdaq Composite, indicating a weakening correlation with traditional stocks. The correlation coefficient with the S&P 500 has dropped from 0.88 in late 2024 to 0.77, while the Nasdaq correlation has fallen from 0.91 to 0.83 in the same period.

Digital Gold Narrative

Interestingly, Bitcoin’s relationship with gold has been strengthening. The correlation coefficient with gold has improved from -0.62 earlier this month to -0.31 currently. This suggests that Bitcoin may be increasingly viewed as a store of value similar to gold.

Such a shift could signal that Bitcoin is emerging as “digital gold,” with gold potentially serving as a leading indicator for Bitcoin’s price movements in the near future.

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Massive Price Drops for These Altcoins After Binance Withdraws Support

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TL;DR

  • Binance unveiled its next delisting effort, causing an immediate market fallout for the involved digital assets.
  • In contrast, tokens gaining support from the exchange usually experience strong rallies, highlighting the platform’s powerful influence over short-term price action.

These Assets Take a Blow

The world’s leading crypto exchange periodically reviews each asset listed on its platform to determine whether it meets quality, safety, or market relevance standards. Based on its recent examination, it decided to terminate all trading services with Alpaca Finance (ALPACA), PlayDapp (PDA), Viberate (VIB), and Wing Finance (WING). 

The delisting is scheduled for May 2, when all sport trading pairs involving the aforementioned tokens will be removed

The token’s valuation will no longer be displayed in users’ accounts after delisting. To view their assets after trading ceases, users should ensure they have not selected “Hide Small Balances” in all (of) their accounts,” the company clarified.

Binance explained that deposits involving these assets will not be credited to users after May 3, whereas withdrawals will become unavailable from July 4. 

“Delisted tokens may be converted into stablecoins on behalf of users after 2025-07-05 03:00 (UTC). Please note that the conversion of delisted tokens into stablecoins is not guaranteed,” the disclosure reads. 

Somewhat expectedly, the news triggered a major price decline for the affected cryptocurrencies. VIB and WING crashed by 42% and 36%, respectively, while ALPACA and PDA witnessed less substantial plunges. 

Reactions of that type are something normal. After all, withdrawn support from Binance leads to reduced liquidity and visibility. It can also trigger fear and uncertainty by damaging their reputation, prompting increased selling pressure. 

A similar thing was observed earlier this month when the exchange scrapped 14 altcoins from its platform. Some of the affected ones, including CREAM, recorded a whopping decrease of almost 60% after the announcement. 

The Pumping Effect

Conversely, embracing a certain cryptocurrency in one way or another from Binance often results in a significant rally. Such was the case with DeepBook (DEEP), whose price jumped by double digits earlier this week after the trading venue launched the DEEP/USDT perpetual contract with up to 50x leverage. 

Other examples include Cat in a Dogs World (MEW), whose valuation headed north after the company placed it in its pre-listing selection pool, Binance Alpha, and Tutorial (TUT), which skyrocketed by 130% following inclusion in the Binance Simple Earn section.

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