The world of cryptocurrencies is full of sharp volatility. We can see strong increases followed by sudden sharp declines. Therefore, it is important to navigate this market wisely.
1. Don't sell in times of panic, and 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'll notice that major assets like Bitcoin go through sharp downturn cycles and then gradually recover in price to achieve higher price peaks.
For this reason, patience and not selling during fear can be a better long-term strategy with major assets like Bitcoin.
Practical question:
Ask yourself before selling: (Will I need this money in the coming year?) If the answer is no, it means you need to be patient with your investment.
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2. Using stop-loss orders.
A stop-loss tool prevents you from losing all your capital on wrong trades.
You can set an acceptable loss ratio, for example, 3%, 5%, or even 10% below the purchase price. This protects you from sudden slips 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. Diversifying your investment portfolio.
Don't put all your money into 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 large losses.
It is also very important that you 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 better yet, trade without leverage, especially in a volatile market.
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5. Choosing strong projects for investment.
During downturns, weak coins often collapse and struggle to recover. Focus on coins known for having real projects behind them, a strong team, practical uses, and significant partnerships.
Avoid:
Meme coins or coins that rely solely on temporary trends or empty promotions.
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6. Keep cash liquidity for emergencies.
Keeping part of your portfolio in stablecoins or cash gives you the chance to act quickly when you see outstanding buying opportunities during market downturns. Without liquidity, you may be forced to sell your assets at a loss just to make a purchase.
Proposed strategy:
Allocate at least 20%-30% of your portfolio as ready cash liquidity.
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7. Follow market news wisely.
Following news, global events, and regulatory changes is very important for understanding market movements. Major news such as government regulations, actions by the US Federal Reserve, or trading platform breaches can severely negatively affect prices.
