In recent weeks, we see how the market is very uncertain and volatile. Downturns can hit even the most experienced investors hard, but those who adopt a solid and disciplined strategy can not only limit losses but also seize opportunities that arise precisely in moments of crisis. Here are some fundamental strategies to protect your crypto portfolio during these times!
Attention, these are not financial advice! (NFA)
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1. Check your emotions
Fear is the first enemy of the investor. During a crash, it's easy to fall into panic, make wrong decisions, and sell at a loss. In a volatile market like crypto, discipline and patience are two essential virtues.
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2. Invest following a strategy
Every investor should have a defined investment strategy starting from their time horizon, setting goals, and especially defining their risk appetite. Knowing in advance when to exit a position, when to enter, or when to stay put is essential to avoid being overwhelmed by events.
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3. Diversify your portfolio
Diversification reduces overall risk and helps avoid being overwhelmed during moments of FUD. Avoid investing everything in a single asset and manage risk by choosing safer projects.
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4. Keep a portion in Stablecoins
Having a portion of your portfolio in stablecoins allows you to protect part of your capital from volatility and, above all, to be ready to seize buying opportunities at lows with liquidity available.
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5. Use Stop-Loss and Take-Profit
Stop-loss orders allow you to automatically sell an asset if the price falls below a certain level, limiting losses. Take-profits allow you to lock in profits when the price reaches a defined target.
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6. Do DCA (Dollar Cost Averaging)
Investing gradually – weekly or monthly – helps protect you from volatility and achieve a lower cost basis. Instead of investing everything at once, with DCA you buy at different price levels, lowering the average cost and reducing risk.
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7. Keep an eye on the macroeconomy
Events such as Fed decisions, inflation, banking crises, or geopolitical issues can influence crypto markets. It's not just about technical analysis: macro awareness is crucial to prepare for potential crashes.
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As always, having a 360° view of what is happening can help avoid being unprepared and knowing how to better handle the surprises in this sector.
Remember: the true investor is not built in bull markets, but in times of crisis, and studying is of fundamental importance!
If you feel experienced and want to try a more challenging type of investment try futures (Remember that in Italy they are not allowed).
