How To Choose The Best Performing Token In A Bear Market
The crypto market is unpredictable. In 2017 we had a massive bull run that turned into a bear market in 2018.
In 2020, the bull run came back with much more energy, investment options, and way better accessibility for investors.
Yet, in 2022, the bear seems to have returned from its cave. In other words, the bear market is back.
And in times like this, more and more people have short-term anxiety and panic sell. So, right now, not so many people know how to cope with the issue, and it becomes extremely hard to know how to select the best token in the bear market.
What's going on with the 2022 bear market?
Generally, investors consider a market to be bearish when the stock values fall by at least 20% from their recent highs. And according to a June S&P 500 performance evaluation, the index officially entered the bear market territory after losing more than 20% from its all-time high in early January.
The bear market gets its name from how a bear hunts its food by dragging its paws down toward the ground. When this occurs in the financial world, the stock market experiences a downturn that might last anywhere from a few weeks to a few years.
A financial crisis or panicked investors' knee-jerk reaction to negative economic news are only two examples of what might trigger a bear market. Strangely, fear may sometimes prolong a bear market well beyond its average lifespan.
However, numerous reasons contributed to the bear market in 2022, including the US inflation rate, which reached a new 40-year high of 8.6%, the conflict in Ukraine, the Federal Reserve's decision to raise interest rates to combat inflation, and the big crypto crash of that year. And now, both Ethereum and Bitcoin are in free fall.
How can you know what the best performing token in a bear market is?
It might be difficult to anticipate which of the 20,000+ cryptocurrencies will recover the quickest or have the biggest price gains, just as it can be challenging to pinpoint when a bear market concludes.
Finding the best-performing tokens that suit your preferences requires double-checking a few things.
During a bear market, it's essential to research the token you want to buy, so you can find out things like its all-time high, how it performed, and what kinds of features it will have in the future.
Before taking any decision:
- Try not to take it based on fear.
- Do not take all the money out if you already have an investment.
- For the best performing token, focus on the long term, zoom out of the current situation and focus on the long term.
In that regard, the tokens that may hold the best potential come from the complex ecosystem in which they get real use.
For example, the MATIC token stands at the core of the Polygon layer 2 Ethereum scaling solution that is currently used by many dapps. SOL stands at the Solana ecosystem core, which has the trust of institutional investors and is used by many dapps thanks to its proof-of-history innovation.
In this weak market, new players have emerged.
One example is the OWL token, under the OwlDao, which has been steadily going up in price for the last six months. The OWL token is a tradable and liquid token that can be used on Owl.Games, an online casino with Web 3.0 features for its users.
In any case, you should try to avoid underestimating the currencies that are now undervalued due to the dominant market and macroeconomic circumstances. When the bear market eventually turns into a bull market, this will set the stage for a major price increase.
Conclusion
Finally, the bear market carries with it enormous dangers. However, the best-performing cryptocurrencies during the bear run may provide a solid foundation for future gains when the inevitable bull run arrives.
However, each investor must decide where and when to put their money in order to maximize the benefits of the next market upswing. This ensures a return on investment whenever the market recovers.
In the face of financial setbacks, the wisest strategy is not to panic and flee the market.