The crypto crash has generated much frustration and panic among investors in the blockchain industry. NFT is not left out of the impact and with popular chains like Solana and Ethereum experiencing significant dips; the NFT bear market has become more real than ever.
Around mid-November last year, Ethereum topped at $4800 and later dipped to $2400. With the recent crash, prices have sunk so low with Ethereum dipping to $1800 before struggling to return to a little of the $2000 mark. Solana had it real bad with a high of $258 around November and down to about $50 in trading after the crash.
While the state of the market can look bleak for flippers interested in making profits over a small window period, long-term holders don’t have to fret much because there is light at the end of the tunnel. In this post, we will look at important tips to survive in a bear market such as what is currently going on in the NFT market.
Do Not Panic
While it is difficult not to panic during this time, especially if you have invested heavily in the market, you still have to maintain calm. Panicking can make you make an irrational decision that may have a more painful outcome at the end of the day.
Now, while NFTs depend largely on the crypto ecosystem, they are still independent. That means the impact of the price volatilities may not be as hard as it is on crypto holders. You can buy NFTs with fiat currency using your credit or debit card and choose to skip crypto. What does that mean?
When the crypto market is down, investors are still interested in buying into reputable projects. If you are a long-term holder, then you don’t have to panic even when the floor prices significantly reduce. If you are confident that a project has long-term value judging from its roadmap, you should consider holding on to your token until the market rebound.
Cut Your Losses
Yes, we said you should wait it out until the market rebound. However, in some extreme cases, you may not be able to wait it out, especially when you need liquid cash for some other projects. In such a case, you should consider cutting your losses and cash out. If you notice that the floor price of the project is on a steep decline, it is best to cash out before it goes too far.
Cash-out the Profit
The bear market is the time for a fast and informed decision. Without a doubt, the crypto market is highly volatile and a bear market can last a while. Some can last weeks or months, with some others last years. If your finance cannot hold out such a long wait, then make a decision.
Do not get emotional about the collectibles in your wallet. If you purchased your art during the highs, do not hesitate to cash out and take your profit. You can always invest in other projects in the future. It is best to cash out on yet-to-be-established projects early enough to avoid possible undercutting customary price dip in the market.
Invest in Stable Coins
After cutting your losses or cashing out on profit, the next best move is to invest in stablecoins to prevent your assets from being devalued. When you hold on to Sol, ETH, or other cryptos, you can experience more losses if the prices continue to dip.
However, if you convert your earnings into stablecoins, such as USDC, USDT, BUSD, and DAI, you can lock in your profits and prevent future losses.
That is because the values of stablecoins are tied to the value of a particular currency, which is often the USD. You should be careful when investing in stablecoins. There are many questionable options out there.
Finally, you need to reevaluate your NFT portfolio. Leverage the bear market to reassess your portfolio and ditch projects that are not offering long-term value.
Take the time to go through the roadmaps of projects that you have invested in and see how far they have gone in the execution of their goals. Remove underperforming projects and carefully select new ones with more value.