How to Allocate Assets During Market Volatility? An Analysis of Gate Financial's Defensive Strategy

Bitcoin (BTC) is currently fluctuating around $70,108, down 0.43% over the past 24 hours, while Ethereum (ETH) is priced at $2,110.72. Recently, Bernstein analysts reaffirmed their target price of $150,000 for Bitcoin in 2026, believing that the current decline is a confidence crisis rather than a structural damage.

At the same time, the market is in a “rebalancing after a high-level correction” phase, lacking a clear unilateral trend, with the overall pattern leaning more towards a “healthy stock game.”

When Bitcoin repeatedly struggles around the $70,000 mark, market sentiment swings between greed and fear. Smart investors have already begun adjusting their strategies to prepare for uncertain cycles.

Market Status: Challenges and Opportunities in Volatile Downtrend

The current market is in a delicate rebalancing stage. On the macro level, expectations of interest rate cuts and geopolitical uncertainties intertwine, leading to risk appetite showing characteristics of “upward resistance and more sensitive pullbacks.” In this environment, capital allocation strategies are shifting from pure growth pursuit to emphasizing defense and certainty.

The crypto market also reflects this trend. After reaching historical highs, Bitcoin has entered a high-volatility oscillation zone between $85,000 and $95,000. The market lacks a clear bullish driver, and incremental funds are cautious.

Meanwhile, excessive leverage in the futures market has been significantly cleared, with open interest falling to safer levels. This greatly reduces the risk of cascade liquidations, signaling a healthy market.

Defensive Logic: Core Principles for Navigating Volatility

In a downtrend channel, defensive allocation does not mean completely exiting the market but prioritizing asset safety and stable returns while retaining participation opportunities for future market rebounds. The core of this strategy is to reduce portfolio volatility, ensure cash flow, and strictly control risks.

The primary goal is capital preservation, avoiding unnecessary principal losses amid sharp fluctuations. Second, seeking deterministic returns through tools like staking, lending, and prudent financial management, even when market direction is unclear. Lastly, maintaining flexibility for future deployment, so that when clear turning points emerge, opportunities can be seized promptly.

Allocation Strategies: Defensive Portfolios for Different Risk Tolerances

Based on varying risk tolerance and market expectations, investors can construct different defensive allocation schemes. Below are three typical approaches, which can be adjusted and combined according to individual circumstances.

For example, conservative investors seeking stable cash flow can focus on Gate’s mainstream coin staking services and fixed-yield products like USDT/USDC. Meanwhile, balanced investors willing to accept some volatility for higher potential returns might combine Gate’s staking with structured products like dual-coin investments, leveraging volatility selling to enhance yields during sideways markets.

Gate Tools: Platform’s Defensive Product Matrix

Gate offers a rich suite of financial tools to help investors implement these defensive strategies effectively.

• Stable Yield Foundation: Staking and fixed-yield products allow users to stake mainstream cryptocurrencies (e.g., ETH, SOL) and earn stable staking rewards while holding assets. The platform also provides various fixed-term financial products with predictable annualized returns, serving as the backbone of defensive portfolios.
• Volatility Market Instruments: Structured products like “dual-coin investments” demonstrate unique value in sideways markets. These products are designed to generate better-than-ordinary holding yields during market consolidation or minor fluctuations, suitable for investors without a clear market direction but unwilling to fully exit.
• Yield Enhancement Strategies: Liquidity mining and new coin mining activities are suitable for aggressive investors interested in DeFi or exploring new projects. These activities often offer additional governance tokens or new coin rewards alongside basic yields but require thorough project research.

Actionable Tips: Optimize Allocation with Event-Driven Opportunities

When building defensive portfolios, timely platform activities can add extra value. Gate frequently launches financial and reward activities aligned with market conditions and user needs, which should be considered in strategy planning. For example, the recent “My2026FirstPost” event emphasizes rewards for thinking, vision, and participation, aligning with the strategic and disciplined approach of defensive allocation. Participating in such activities can reinforce long-term, rational investment psychology.

For VIP users, Gate’s VIP New Year Red Packet Rain and similar events, driven by prize pools, inject additional momentum into early-year asset allocation. These activities are often linked to asset size, trading behavior, or GT holdings, and can be factored into overall yield considerations when planning asset storage and liquidity.

After the market’s noisy phase, a “re-pricing” process often signals the start of a new cycle. As the Federal Reserve’s policy path, institutional fund flows, and major upgrades like Ethereum’s “Glamsterdam” become clearer, market uncertainties may dissipate.

Regardless of market direction, having a diversified defensive allocation built with Gate’s financial products can help you accumulate strength in bear markets and stay active in bull markets. Investing is not only about market prediction but also an ongoing exercise in self-risk management.