How to Mentally Survive a Bear Market

A 3-phase approach to psychologically prepare yourself to survive these difficult times that we are all facing and that you will have to face during the upcoming months.

Every day you spend countless hours scrolling through your feed. This commitment is motivated by your desire to find alpha and build an edge. Far from that, you waste your time looking at charts, pepes, waifus, and engaging in absurd discussions. This behavior is not only a waste of your time but also negative for your well-being and long-term goals.

During the up-only bull market, the negative impacts are hidden behind the exuberance of astronomical gains. You get CT-pilled.

Nevertheless, when the bear market hits, everything unwinds. People get angry and depressed. You are down bad and stick to old patterns that your brain associated with the dopamine hits of the bull market. You are stuck.

You don't realize it, but you are trapped by a powerful social media algorithm, the regret of missed gains, and the pain of your losses. You got addicted to numba go up, and your drug is now gone. You try to mimic the same behavior of the bull market, but the environment has changed. This time, there is no positive impact on your portfolio.

So what should you do to preserve your mental health?

Phase 1: Self Acknowledgement.

Should you leave the boat?

Figure out if you are here for the long term or not.

If your thesis and ethos are not aligned with the space, it is best for you to acknowledge that you were only here for the quick gains and act accordingly.

Sisyphus @0xSisyphus

in crypto, where there are no fundamentals, most people only have conviction until 40% down or so this means they'll happily hold thru a 15% drawdown but if the market really breaks, they'll panic its better to panic first or not at all

This tweet by @0xsisyphus reflects it perfectly. The more sincere that you are with yourself, the better. Don't hold assets that make you feel uncomfortable or fearful. Move on if necessary. If you are eventually going to capitulate, you should do it asap. There is no shame in selling something you don’t feel comfortable holding anymore.

Are you comfortable with your current portfolio?

You may want to stay, but you shouldn’t do it at any cost. Dump your worthless bags. Let that burthen go. Evaluate your portfolio and get rid of those assets that do not align with your thesis anymore or that you are not comfortable holding. This may mean moving back to stables and/or majors (ETH/BTC). Even if you are down horrendously, we will most likely bleed more, so it's never late to reallocate. Again, the key is to be true to yourself. You should be able to sleep at night while also holding to zero if necessary.

Phase 2: Slowing Down.

Always take CT with a grain of salt.

CT is always noisy and frenetic. It is an ego competition. Most of the accounts are either rich people that are still kids, narcissists that look for clout and pretend to always make the right calls and/or be rich, or angry people that like to shit on everything they can.

Instead of spending endless hours scrolling through your feed, take a step back. Calm down. The exuberance of the bull wasn't as great as they made you believe, and the bear market is not the end of the world either. Acknowledge that most accounts flip biases constantly. They like to pretend they know what they say, but most actors aren’t that smart. Don't fall for that.

Limit your exposure to CT, but keep engaged with the space.

If you are addicted to Twitter, I encourage you to practice some dopamine fasting. Do not open Twitter 1 or 2 days a week. If you are able to take it one step further and do complete fasting that would be even better.

It is also important to curate your feed. It will help you spend fewer hours browsing through the noise. An easy option can be limiting your exposure to content curators such as @darrenlautf (the daily ape) or @nosleepjon.

It can be counterintuitive because if you want to eventually make it, you need to not leave the space. But trust me, if you burn out or end up being depressed, you will leave.

Will you miss on stuff?

The bottom won't likely be a wick, and even if it is, we will definitely trade horizontally for a long period of time. Investors are currently leaving the market, and there is a general risk-off mentality. Before the next bull run, market sentiment needs to change and new money needs to start flooding the market. We still need A LOT of time for that to eventually happen.

Yano 🟪 @JasonYanowitz

1/ There are 3 stages of a bear market. We just entered stage 2 🧵

I encourage you to read this thread by @jasonyanowitz to understand how a bear market unwinds. As you’ll see, builders will continue to buidl, but you won't miss any life-changing opportunities by reducing your CT exposure. Things move way slowlier, and you will be able to spot opportunities if you are still around, don't worry. Get rid of the mentality that you need to knife catch the absolute bottom. It is best to invest in a position of strength once you see that the wind is switching.

Phase 3: Preparing for the future.

Build your own edge.

The best way to prepare yourself for the bull market is by building your own edge. Some ideas that you can pursue:

• For coders:

  • Learn solidity or vyper to develop smart contracts.

  • Leverage python and JS to build on-chain bots. Get into MEV.

  • Learn GraphQL to build subgraphs.

  • Create on-chain analysis with tools such as Dune Analytics.

• For creators:

  • Use your skills to join a DAO (marketing, content, community management, etc.)

  • Start writing and sharing content to build an online presence.

• For everyone:

  • Review the fundamentals/valuations of existing projects. Look for undervalued stuff.

  • Do research on emerging projects. Try to spot the narratives of the future.

  • Be an active participant in communities that are relevant to you. Build your network.

  • Try to build passive income streams outside of crypto (to have more dry power).

  • Save money on a monthly basis and start to DCA at valuation levels that are appealing to you.

Learn from the past.

Reflect on the previous cycle. List the things that:

• Worked well. You should try to repeat them.

• Could be improved. Try to decide how will you further improve those areas in the future.

• Didn't work. Assess why you did wrong. Prepare yourself to not make the same mistakes again.

A helpful, yet underrated, practice is to share your mistakes/losses with your friends from the space. Although it may initially feel embarrassing, there is nothing wrong with sharing your losses with friends. In fact, sharing this burden will help you in a positive manner, letting go of the guilt. You may also end up experiencing a deeper connection with those friends since they will most likely want to share their experiences as well.

Retake old habits

Crypto can be captivating, but we shouldn't get rid of everything else to fully devote our lives to this industry. Most of us end up sacrificing almost all of our free time, but it shouldn't be like this. Try to have a healthier balance. Take care of those relationships that you haven't been paying attention to. Start doing sports again, or maybe retake an old hobby. But the most important one is to go outside and enjoy nature. Touch grass anon.

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No one knows how all this will unwind, but the only certain thing is that you only live once and shouldn't be feeling depressed because of temporary market movements. It is easy to get lost and discouraged with all the CT drama, but the fact is that life is full of opportunities and you still have plenty. Take care of yourself and come back stronger!