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Bear Market Position Sizing Strategy

Preserve capital and position for the next bull run with defensive strategies

Surviving and Thriving in Crypto Bear Markets

Bear markets create millionaires - if you have capital left to invest

Current Bear Market Status

-65%
BTC from ATH
$1.1T
Total Market Cap
14mo
Duration So Far
0.75%
Max Risk/Trade

Capital Preservation First

Your #1 goal is surviving with capital intact. Reduce position sizes to 0.5-0.75% risk per trade and keep 50-70% in stablecoins.

DCA Accumulation

Use systematic dollar-cost averaging to build positions. Start with $100-500/month and increase during capitulation events.

Quality Over Quantity

Focus on BTC, ETH, and top 10 projects only. 90% of altcoins from the previous cycle won't survive to new highs.

The 4 Phases of a Bear Market

Phase 1: Denial (Months 1-3)

  • Market drops 20-30% from ATH
  • "It's just a correction" mentality
  • Strategy: Start reducing positions, raise 30% cash

Phase 2: Fear (Months 4-9)

  • Market down 40-60% from ATH
  • Mainstream media turns negative
  • Strategy: Hold 50% cash, start small DCA

Phase 3: Capitulation (Months 10-15)

  • Market down 70-85% from ATH
  • Crypto is "dead" according to media
  • Strategy: Aggressive accumulation begins

Phase 4: Accumulation (Months 16-24)

  • Sideways price action, low volatility
  • No mainstream interest
  • Strategy: Maximum accumulation, prepare for next cycle

Bear Market Position Calculator

Calculate defensive position sizes and DCA strategies

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DCA Strategy Calculator

Calculate optimal dollar-cost averaging amounts based on your portfolio size and bear market phase. Includes accumulation schedules and position sizing for defensive strategies.

Bear Market Case Studies

Learn from those who survived and thrived

2018-2019 Accumulator Success

Strategy: DCA $500/month into BTC and ETH only

Capital Allocation: 20% crypto, 80% stablecoins

Entry Range: BTC $3,200-6,500

Result: 400% return by 2021 peak

Key Success Factor: Patient accumulation over 18 months without trying to catch knives

2022 Luna Collapse - Overexposed

Strategy: All-in on "oversold" altcoins

Capital Allocation: 90% in altcoins, 10% cash

Leverage Used: 3x on "sure" bounces

Result: Lost 85% of portfolio value

Key Mistake: No capital preservation strategy, catching falling knives with leverage

Complete Bear Market Strategy

Portfolio Allocation by Market Phase

Market Phase Cash/Stables BTC/ETH Altcoins
Early Bear (-30%) 40% 50% 10%
Mid Bear (-50%) 60% 35% 5%
Late Bear (-70%) 40% 55% 5%
Accumulation 20% 70% 10%

DCA Strategy by Account Size

  • $1,000-5,000 Account: $50-100/month, BTC only
  • $5,000-25,000 Account: $250-500/month, 70% BTC, 30% ETH
  • $25,000-100,000 Account: $1,000-2,500/month, 60% BTC, 30% ETH, 10% top alts
  • $100,000+ Account: Custom strategy with 20-30% for opportunistic buys

The Psychology of Bear Markets

Common Emotional Traps

❌ Revenge Trading

Trying to "win back" losses with larger positions

❌ Bottom Fishing

Buying every 10% dip thinking it's the bottom

❌ Denial

Refusing to accept the bear market reality

❌ Capitulation

Selling everything at the absolute bottom

✅ Winning Mindset

  • View bear markets as accumulation opportunities
  • Focus on building position count, not dollar value
  • Celebrate buying at lower prices
  • Think in years, not months

Bear Market FAQs

How long do crypto bear markets typically last?
Crypto bear markets typically last 12-24 months, with Bitcoin experiencing 70-85% drawdowns from all-time highs. The 2018 bear market lasted 13 months, while the 2022-2023 bear market extended for approximately 18 months. Plan your capital accordingly.
What percentage should I keep in stablecoins during a bear market?
During bear markets, keeping 50-70% in stablecoins is recommended. This provides dry powder for accumulation during capitulation events and protects your capital from further drawdowns. Adjust based on market phase - more cash early, less during late-stage capitulation.
Should I DCA or wait for the bottom in a bear market?
Dollar-cost averaging (DCA) is generally more effective than trying to time the bottom. Start with small amounts (10-20% of intended allocation) and increase as prices drop further. Nobody can predict the exact bottom, but DCA ensures you get a good average price.
Which cryptocurrencies survive bear markets?
Historically, Bitcoin and Ethereum have the highest survival rates. From the top 100 coins, typically only 10-20% reach new all-time highs in the next cycle. Focus 80-90% on BTC/ETH, with only 10-20% in carefully selected altcoins with strong fundamentals.

Navigate Bear Markets with Confidence

FullSwing AI helps you preserve capital during downturns while positioning for the next cycle with intelligent alerts and portfolio management.

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