“Chaos is a ladder” -Littlefinger. If current volume trends on Opensea continue through the end of the month we will see a drop of 60% since January highs. That will undoubtedly put us in bear market territory. With such a volatile market and asset class it’s critical to always be prepared for this type of market action. Quick decisive moves will make the difference between an investor who loses their pants and one that capitalizes on very rare opportunities. Let’s go into some of the ways you can avoid losing it all during a mega bear market like the one we’re facing now.

Stick to High Conviction Plays

The first thing I’m doing as we enter a bear market is examining my current portfolio. I’m a big fan of pen and paper so I’m grabbing my moleskine notebook and Muji pen and making a list. I’m writing down all my current positions and classifying them as high, medium, and low conviction. Any plays I have that are low/ low-medium /medium conviction I’m probably liquidating. There are some exceptions to this rule. For instance I have a medium conviction play that the founding team totally botched the launch of. Their staking contracts were completely broken. The floor price quickly went from .3 to .06. At this point it’s not even worth me selling. I have a lot more to gain at this point than lose, so I’m holding onto this (and putting into my hidden folder, whoops). I have a few medium-high conviction plays that I’m lightening up a bit, not totally selling. And then I’m not touching my high conviction plays (Mutant Ape Yacht Club and Psychedelic’s Anonymous).

As I’m making this list I’m also writing down why I have such high conviction. It’s easy to get emotional during times like this and forget why we have such high conviction. Write down not only why you are bullish on your high conviction plays, but also why you’re bullish on the NFT market overall. By doing this you remind yourself why you got into the market in the first place. On the other hand, maybe by questioning your assumptions you determine you’re not that bullish on NFT’s. That’s alright too, but by writing down all your assumptions you can get as close to being objective as possible.

By doing this I see a few benefits. One, I have a better grasp at where I stand in my portfolio and two, I get some liquidity for my next step.

Make a Target List

Now that you have some liquidity it’s time to figure out what we want to do with it. You have two options from here, hold onto you eth or use it strategically. In order to take out emotion and use it strategically we need to make a list of projects we want to target. During bear markets a lot of us have opportunities to get into projects we’ve always wanted to get into that we couldn’t afford previously. For instance, over the last week both Azuki and CloneX dipped below 10 eth, making them more affordable to the average investor. Next to your list of high conviction plays you own, start making a list of the projects you want to get into that you have a high conviction on. These should be mostly blue chips. For me this list is CloneX, Azuki, Mutant Ape Yacht Club, and Deadfellaz. These are projects I don’t currently hold that I’d like to either get into or buy more of. Now as prices dip I have a watchlist and can wait for the right opportunity to get in.

Don’t Rush, Build Slowly

Nobody knows how long this bear market will last. It can last for months and even years. It’s very easy to get emotional and try to unload our liquidity into projects all at once. An important thing to remember is prices might always keep going down. Dollar cost average in and never unload all at once. Take your time and keep an eye on Opensea volume. Stick to your convictions and if you ever feel yourself getting really ramped up emotionally then lock your computer and go for a walk. There will always be another opportunity to enter the market.

Conclusions

It’s hard to argue at this moment in time we are in one of the biggest bear markets the NFT space has ever seen. A lot of people will lose money here, but if you play your cards right, take out emotion, and move with purpose you can set yourself up for massive profit in the future. Any other tips I missed here? Feel free to engage with me on Twitter and sign up for my newsletter.