How Bitcoin bulls make money during downturns — and why BTC could hit $85k soon

When Bitcoin experiences a decline, most individuals see a decrease in numbers on a screen. However, a dedicated bull sees this as an opportunity to accumulate more sats quietly in preparation for the next surge.

Bear markets can be tough to endure in real-time. Social media timelines are flooded with capitulation, declarations of “Bitcoin is dead” resurface, and those who were once enthusiastic at the peak now appear disinterested.

Nevertheless, historically, disciplined bulls have thrived in such conditions, increasing their Bitcoin holdings while others succumb to exhaustion.

You don’t need extensive technical knowledge to achieve this. With a simple framework and a few basic strategies, a long-term Bitcoin believer can utilize downturns to come out with more BTC than they initially had, positioning themselves for whatever lies ahead.


Step one, determine your growth objective

Prior to implementing any strategy, a Bitcoin bull must answer a fundamental question: Are they aiming to grow the dollar value of their portfolio or the number of BTC in their possession?

In a declining market, these objectives lead to different approaches.

A trader focused on dollars may be tempted to sell early, buy back at lower prices, and report profits in fiat terms, even if they end up with fewer Bitcoins than they started with.

On the other hand, a BTC-focused bull is playing a different game. Their goal is to accumulate more coins by the time the next cycle reaches its peak, even if the market value appears unappealing during the journey.

Each tactic below is more effective when viewed through the lens of increasing the stack size, rather than monitoring daily profit and loss statements.


Implement Dollar Cost Averaging methodically

Dollar Cost Averaging (DCA) may be a mundane tool, yet it is underrated in a declining market.

The concept is straightforward. You decide in advance to purchase a fixed amount of Bitcoin at regular intervals, regardless of the price. Instead of trying to time the market bottom, you allow time to smoothen out your entry as prices decline.

For committed bulls, combining DCA with a well-defined plan is crucial. This plan may include:

  • Allocating a fixed percentage of income or cash flow to Bitcoin monthly
  • Setting predetermined buy dates, such as the first and fifteenth of each month
  • Having an additional “dip fund” that triggers only if prices drop below specific pre-set levels

The rules are essential. During significant market downturns, emotions may urge you to “wait a bit longer for even lower prices.” This tendency often causes individuals to miss out on optimal buying opportunities. Having a standing order may be uneventful, but it ensures that you act when your future self will appreciate your decision.

For BTC stack growth, DCA serves as the foundation for other strategies.


Utilize small, straightforward hedging techniques

Shorting may be a taboo for many Bitcoin bulls, but a carefully sized hedge can safeguard your stack and aid in accumulating more BTC during market declines.

You don’t need excessive leverage or sophisticated trading screens for this. One approach is to treat hedging as an insurance policy. Bulls often allocate a small portion of their BTC holdings or capital to a short position during periods of market exuberance, such as after a parabolic move and euphoric sentiments.

The rationale is simple. If prices plummet, the short position generates profits. Instead of converting those gains into cash, a Bitcoin bull can reinvest them in more BTC at lower levels. If the market disregards the pullback and continues its upward trajectory, the small hedge expires at a loss, while the primary long-term holdings benefit from the trend.

The key word here is “small.” Over-hedging can inadvertently transform long-term bulls into net bears. The objective is not to bet against Bitcoin, but to reserve some dry powder that responds effectively to sharp downturns and then reinvest the gains into long-term holdings.


Engage in Grid Trading to capitalize on market volatility

In volatile markets, conviction often wanes. Prices fluctuate within a range, social media chatter diminishes, and uncertainty lingers about the next market move.

For a Bitcoin bull comfortable with leaving a portion of their stack to operate based on a set of rules, grid trading can convert this mundane volatility into additional coins.

The concept involves placing a series of staggered buy and sell orders at predetermined price levels within a range. For instance, if BTC is trading between $45k and $30k, a bull might:

  • Set buy orders every $2k lower during the descent, funded with stablecoins
  • Establish sell orders every $2k higher during the ascent, converting profits into stablecoins or reinvesting in BTC held in a separate wallet

When prices oscillate within this range, the grid automatically buys low and sells high, generating incremental profits. These gains can then be consolidated into additional long-term Bitcoin holdings.

Modern exchanges and some trading bots offer user-friendly grid tools to automate order placement, although this convenience comes with counterparty risk. As always, a bull prioritizing stack preservation keeps the majority of holdings in cold storage and allocates only a defined, smaller portion to active trading strategies.


Employ Options for protection, not speculation

Options are often portrayed as speculative bets on crypto Twitter, but they can also function as a defensive tool for Bitcoin bulls seeking protection without resorting to panic selling.

For instance, purchasing put options during periods of elevated uncertainty can provide a safety net. A put option grants the holder the right, though not the obligation, to sell BTC at a specific price within a specified timeframe. The premium paid resembles an insurance fee. In the event of a market crash, these put options appreciate in value, generating profits that can be reinvested in Bitcoin at lower prices.

There are more advanced strategies, like selling covered calls on a portion of your stack. By doing so, you collect option premiums in exchange for agreeing to sell some BTC if prices reach a predetermined level in the future. When utilized prudently, these premiums can enhance holdings during quiet periods, although bulls must acknowledge the risk of having to part with that portion of their stack if the market experiences a significant upsurge.

Once again, size and intent are more crucial than complexity. A long-term bull isn’t aiming to construct a derivatives hedge fund. The role of options in this context is to offer modest protection and occasional yields that flow back into core holdings.


Generate Yield and consider lending cautiously

Every crypto bear market has been accompanied by its own yield narrative and subsequent failures. From offshore lending platforms to overleveraged trading firms, the lesson is consistent: Counterparty risk can erase years of diligent accumulation in a single catastrophic event.

However, this doesn’t imply that all yield opportunities should be avoided indefinitely. It underscores the importance of treating yield as a supplement, not a primary source of income, for a Bitcoin bull aiming to endure multiple market cycles.

A prudent approach may involve:

  • Securing the majority of BTC in self-custody, offline and inaccessible
  • Assigning a small, clearly defined portion to low-risk yield strategies, such as those offered by regulated platforms with transparent reserves
  • Considering all yield as temporary and reversible, with a strategy in place to withdraw funds during adverse market conditions

The yield generated can be used to purchase additional spot Bitcoin on a regular schedule or to fund other hedging strategies mentioned earlier. The objective remains constant: Expand the stack while surviving potential failures within the broader crypto credit system.


Establish a documented methodology for the upcoming cycle

None of these strategies demand expert-level trading expertise. What they necessitate is deliberate action. A Bitcoin bull emerging from a bear market with a larger stack typically has three key components in place:

  1. A clear primary objective of accumulating more BTC, not just increasing dollar values on a screen
  2. A foundational layer of automated accumulation through DCA
  3. A concise set of simple, well-defined tactics to leverage volatility and mitigate downside risks

Bear markets eventually run their course. Sentiment reaches a nadir, forced sellers vanish, and the asset that was disregarded at its lowest point begins to ascend once more.

When this next phase commences, the query for a Bitcoin believer is straightforward: Did the downtrend diminish your stack, or did you quietly amass more, ready for the moment the market recollects why it was significant in the first place?

Is Bitcoin currently in a bear market?

The current price action of Bitcoin resembles a gradual descent down a liquidity stairway.

Each level, $112k, $100k, followed by $90k and the upper $80k range, has acted as a step on a ladder, momentarily halting price before giving way.

Presently, the market hovers within a wide purple band in the low $90,000s, an area where trapped long positions are unwinding, and new short positions are being established.

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Bitcoin price channels

If selling pressure resumes, the next significant cluster of historical bids, market-maker inventory, and ETF-era liquidity is situated around $85,000. This isn’t a prediction; it’s merely the next progression on the path Bitcoin has adhered to for over a year.

Understanding this directional map is crucial for bulls as it transforms fear into structure. If the descent towards lower levels persists, the market may present a series of increasingly appealing opportunities for long-term accumulation.

Whether prices rebound prematurely or test lower thresholds, these regions typically become focal points where volatility decreases, emotions peak, and strategic BTC-oriented thinkers discreetly enhance their stack.

In essence, directionality isn’t about pinpointing the market bottom; it’s about recognizing where opportunities tend to converge when everyone else is fatigued.

Disclaimer: This article is intended for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency markets are volatile; always conduct thorough research and seek guidance from a professional before making financial decisions.