Bitcoin is currently below $75,000, amid more than $1.28 billion in outflows from ETFs. During such periods, investors lose money not only because the market falls, but also because of the wrong decisions they make under the influence of fear and greed.
Here are five mistakes beginners repeatedly make during bear markets.
1. Using high leverage to try to recover losses
This is the most destructive mistake for portfolios. When a beginner loses 20% of their capital, they may open a trade with 10x or 20x leverage, hoping to recover their capital quickly. In a volatile market with daily liquidations exceeding $1 billion, as happened yesterday, even a small 5% bounce can lead to the account being completely liquidated. A bear market doesn’t call for excessive courage, but for survival.
2. Panic-selling at every dip
Many beginners sell strong assets like Bitcoin and Ethereum at the first 10% dip, then watch the market rebound hours later. Historical data suggests that 80% of major losses in a bear market come from selling at the bottom. A temporary drop isn’t an actual loss unless you turn it into one by selling. Setting a clear stop-loss plan before entering a trade is more important than making a decision during a downturn.
3. Investing all available funds in a single trade
A beginner invests everything they have at a price they believe is the bottom. If the price drops another 10%, they’re left with no funds to adjust their position or take advantage of new opportunities. The right strategy, used by institutions, is to buy gradually, a practice known as DCA, dividing capital into 4 to 5 installments at different price levels. This way, even if the market continues to fall, you’ll still have a better average purchase price and room to maneuver.
4. Ignoring risk management and focusing only on profit
A beginner asks, “How much will I make?” while a professional asks, “How much could I lose?” Failing to set a risk limit for each trade (ideally no more than 1–2% of the portfolio) gradually erodes the portfolio. In the current bear market, where coins like XRP and Solana are declining more sharply than Bitcoin, putting your entire portfolio into a single high-risk coin could result in a 50% loss in one day.
5. Following rumors and influencers instead of data
During periods of fear, a lot of misleading news spreads about a new regulatory ban or an imminent collapse. A beginner relies on a tweet from an anonymous account to decide whether to buy or sell, ignoring real data such as ETF fund flows, technical support levels, and CPI inflation figures that actually move the market. The market rewards those who read the numbers and punishes those who follow their emotions.
A bear market isn’t the end of the road; it’s a test of an investor’s discipline. The portfolios that survive aren’t those that avoided losses, but those that managed their losses wisely and prepared for the next rebound.
