The economy is facing an outlook bleaker than a Welsh weather forecast, and few are rushing to buy risk assets. Here are a few tips for weathering unfavorable market conditions.

Option #1: Save cash

There’s no shame in sitting on the sidelines and saving cash or stablecoins.

When bullish momentum returns, you will have plenty of dry powder to make big allocations. In the meantime, there are still lots of opportunities to earn yield across crypto markets as long as you trust the protocol you’re using.

But isn’t this timing the market, which is impossible? Possibly. But this is more about spotting momentum and general market trends as opposed to more focused price targeting or calling reversals. Larger trends are easier to spot. However, if that’s a bit risky, there’s another option.

Option #2: Dollar-cost average (DCA)

Have you ever been to a physiotherapist with a wrist or back complaint? You’re hoping for a quick and easy cure, but instead, you’re given a sequence of trifling, tedious exercises to do daily for three months.

Well, dollar-cost averaging is the investing equivalent of that. It’s not sexy or even very interesting but it has a very high chance of working out in your favor given a long enough time horizon. And these days, there are automated bots that do it for you, so that helps.

​​Related: 5 reasons 2023 will be a tough year for global markets

These first two options could be combined to create a strategy. For example, putting 50% aside in stablecoins waiting for bullish momentum to return, and putting 50% into the market in a price-agnostic manner. This tactic allows for some exposure to the market, which can help in resisting FOMO when the market rallies, even though your overall thesis remains bearish.

Option #3: Find assets that outperform

Decentralized perpetual exchanges have been the darlings of the bear market. Following the FTX scandal, traders flocked to decentralized options, crying, “where can I short?” Many went to protocols such as GMX and ApeX, which are up about 70 and 50% this year, respectively.

There will always be assets that outperform during bear markets but finding them is labor-intensive and going long during a downtrend is risky. So this strategy should be approached with caution and is best used by investors with the nous and experience to spot a good project and apply solid risk management.

Option #4: Use derivatives

There are many strategies using derivatives and combinations of contracts to ensure profit in down-trending and sideways markets. For example, using options to create a “bear put spread” that allows you to make money when an asset falls by locking in a good selling price at a reduced rate.

There are also pseudo-delta-neutral strategies that advanced yield farmers use to long and short both sides of a liquidity pool. This reduces their exposure to the volatility of the assets they are holding so they can collect the pool fees while reducing their downside exposure.

The hard part is not so much actioning these strategies — there are instructions easily available online — but managing them and sizing your position. The management and position sizes can make or break these kinds of trades. They can be profitable in a bear market but should be used with caution.

Option #5: Keep your head on while others are losing theirs

Unless you’re a free climber like Alex Honnald, you wouldn’t attempt to scale any kind of cliff without good safety equipment. The same goes for crypto investing.

What safety equipment? Well, an emergency fund that is kept in cash is a good starting point. It should cover about six months of basic living expenses and shouldn’t be used for yield, borrowed against or staked.

Related: Bitcoin will surge in 2023 — but be careful what you wish for

You should also have a sinking fund, kept in similar circumstances (read: highly liquid) to pay for large expenses that crop up such as car repairs or, say, getting stuck in expensive Singapore for a week while your outgoing visa is delayed. The sinking fund will give you that extra buffer of support so you can keep your emergency fund pristine and use it for genuine emergencies only.

Finally, recessions are hard, so remember to go look after your mental health. If you are worried about your portfolio or constantly checking the price, then you are making yourself less healthy and reducing the chance you will make good decisions when the time comes. Therefore, go outside, turn off the computer and play around.

Develop your life outside your investing and trading activities. If you don’t do that, where will you go when you finally make it?

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Crypto exchange Binance closed a trader account on Dec. 9 after a user complained about the exchange’s response for alleged funds theft. Binance CEO Changpeng “CZ” Zhao said the firm does not want to service “unreasonable” clients.

A user by the name of CoinMamba on Twitter started complaining about the lost funds on Dec. 8, claiming that a leaked API key tied to crypto trading firm 3Commas was used “to make trades on low cap coins to push up the price to make profit.”

The trader claims in a series of tweets that Binance was unable to provide him with appropriate support:

Binance CEO also took to Twitter on Dec. 9 to clarify the situation:

As the user continued to complain on the social media platform, CZ admitted in another tweet to be considering putting the user’s account “in off boarding (withdrawal only) mode,” claiming “we don’t want to service people who are unreasonable.” The tweet was later deleted but is still available as a screenshot in the thread. The user’s account was then closed, with three days to withdraw funds.

According to the user tweets, 3Commas denied any exploit on its protocols and databases and, therefore, had no responsibility for the stolen API keys. “On the basis of the information we have today, we have found that no encryption protocols have been found to be compromised and no breaches of 3Commas’ account security databases have occurred,” stated 3Commas support.

Other Twitter users also raised the issue of the alleged API hacker, requesting Binance to halt withdrawals and investigate the incident. 

On Nov. 13, Binance CEO confirmed that at least three users faced unexpected transactions on their accounts after sharing their API Key with third-party platforms Skyrex and 3Commas. He then recommended users to delete related API keys.

Coinmamba claims to have been a Binance client for over five years, and he still has futures positions open on the platform.

Binance and 3Commas did not immediately respond to Cointelegraphs' requests for comments.