The world of cryptocurrencies is full of sharp fluctuations. We can see strong increases followed by sudden sharp declines. Therefore, it is important to deal wisely with this market.
1. Don't sell in times of panic, focus on the long-term vision
During market corrections, most investors feel fear and rush to sell their coins at a loss.
But if you look historically, you will notice that major assets like Bitcoin go through sharp downturn cycles and then the price gradually recovers and reaches higher price peaks.
For this reason, patience and not selling during fear can be a better strategy in the long term with major assets like Bitcoin.
Practical question:
Ask yourself before selling: (Will I need this money in the next year?) If the answer is no, then you need to be patient with your investment.
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2. Use stop-loss orders
A stop-loss tool prevents you from losing all your capital in wrong trades.
You can set an acceptable loss percentage, for example, 3%, 5%, or even 10% below the purchase price. This protects you from sudden drops and makes your trading more disciplined.
Practical example:
If you bought Bitcoin at $85,000, set a stop-loss order at $80,000, for example.
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3. Diversify your investment portfolio
Don't keep all your money in one coin no matter how attractive it is. Distributing your funds among several strong and stable coins (like Bitcoin, Ethereum, and Solana, for example) reduces the risk of significant losses.
It is also very important to allocate a small part of your portfolio to stablecoins (liquidity) to seize attractive opportunities during a downturn.
Important information:
Diversifying assets does not completely prevent losses, but it can reduce the impact of sudden shocks.
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4. Avoid trading with high leverage
Trading with leverage amplifies profits, but it also doubles losses to the same extent. This means that when you use high leverage (like 10 times or more), even a small movement against you can liquidate your entire account.
Tip:
If you insist on using leverage, use low leverage (only 2 or 5 times) or preferably trade without leverage, especially in a volatile market.
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5. Choose strong projects for investment
During downturns, weak coins often crash and struggle to recover. Focus on coins known for real projects backed by a strong team, practical uses, and major partnerships.
Avoid:
Meme coins or coins that rely solely on temporary trends or empty publicity.
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6. Keep cash liquidity for emergencies
Keeping part of your portfolio in stablecoins or cash gives you the opportunity to act quickly when you see special buying opportunities during a market downturn. Without liquidity, you may have to sell your assets at a loss just to be able to buy.
Proposed strategy:
Allocate at least 20%-30% of your portfolio as ready cash liquidity.
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7. Follow market news wisely
Following global news, events, and regulatory changes is very important for understanding market movements. Major news such as government regulations, movements by the US Federal Reserve, or breaches of trading platforms can significantly negatively impact prices.
