Aliens TLDR

Some analysts believe that the price of Bitcoin may fall by more than 80% from its all-time high based on the events observed in previous bear markets, indicating an eventual price as low as US$13,800.

What then, are the common pitfalls to avoid when trading derivatives during a bear market?

Preprare sufficient margin Users who prefer coin-margined futures or swaps trading should choose a contract whose underlying asset they have the ability to increase if necessary.

Should the price of the asset increase constantly under a short position, the margin will need to be supplemented, which equates to a higher cost for the trader.

Choose a reliable futures exchange In a bear market, choosing a reliable futures exchange indicates you should never worry about asset security and system operations.

In addition to advanced risk-control systems, they usually feature advanced professional functions, enabling users to capitalize on price volatility even during a bear market.

Future, Swaps and Options to choose from Huobi Futures provides a suite of crypto derivatives products, including USDT-margined futures, coin-margined futures, USDT-margined swaps, and coin-margined swaps.

Huobi Options traders can buy or sell an asset at a predetermined price, either before or on a specified date.

All of the above contracts enable users to speculate on future price movements of an underlying asset for income at a much lower cost than the asset itself, or hedge the risk exposure of their existing positions.

Safe and smooth system to cope with extreme cases The Huobi Futures system has now been upgraded to V7.0.6, and the response speed for placing orders has been doubled, greatly increasing the efficiency of the system to cope especially with ever-changing market conditions.

Three-phase liquidation system The majority of Huobi Future’s management and staff come from leading investment banks and have extensive experience with derivatives products.

In the second year of its establishment, the platform introduced the three-phase liquidation protection mechanism, helping users avoid sudden, forced liquidations: When liquidation is about to be triggered, the system will cancel all open orders of the asset first; If the margin ratio is still ≤0, the long and short positions of the same contracts will be filled in with each other; If the margin ratio is still ≤0, the liquidation will be triggered and the system will decrease the position to a certain extent; Unlike other platforms that charge extra fees when liquidation is triggered, Huobi Futures charges zero liquidation fees.

When both the moving average of the EMA index and the margin rate calculated from the latest price are less than or equal to zero, the user’s position will be liquidated.

Huobi Futures has introduced a series of features such as grid trading, trailing stop, “follow a maker” and “taker”; these enable users to execute more advanced strategies while saving time and effort.

While current internal and external environments are not able to save crypto within a short time frame, we can still hold confidence in the long-term future of the crypto market.