Crypto markets are famously volatile. Over the past few months we have seen some dramatic price fluctuations. It is inevitable that your crypto holdings will decrease at some point. When this happens, you may find yourself tempted to panic sell just as you might be tempted to buy into a skyrocketing coin when the market conditions are more positive. Removing emotion from your trading moves can help reduce your losses. Go with your head, not your heart.
When you are buying a coin with the hopes of a short-term increase, you could choose to set a stop loss to minimise your losses if the coin price unexpectedly decreases. You can set stop orders on several well-known Exchanges like Bitfinex, Quionex and Kraken.
Wait it out
We know the market is volatile. If you buy into a coin and it decreases in value, you can either cover yourself with a stop order, or if your coin is a long-term hold, you may want to wait it out. Have a look at price fluctuations over the last couple of months and see how the value has increased and decreased.
If you have decided waiting is better than selling at a loss, dollar-cost averaging your buy-in can be an option. Now that the price has decreased, you may wish to buy in again. This will reduce your average buy price so that the coin does not have to increase in value too much for you to be back in profit. This approach underlines the importance of keeping a diversified portfolio and not being all-in at any one time.