The 9 Methods When Bitcoin Price Drops as a Beginner Crypto Investor

Falling bitcoin and crypto prices can be extremely daunting when you’re just starting out trying to make money online. Top coins like BTC and Ethereum have crashed over 70% from their all-time highs, leaving many beginners wondering how to deal with massive volatility.

The 9 Methods When Bitcoin Price Drops as a Beginner Crypto Investor

While experienced crypto investors remain bullish on blockchain technology long-term, new traders need strategies for handling pullbacks without panicking. Here are 9 tips for managing bitcoin price drops on your journey to generate internet income:

1. Stick to Your Dollar Cost Averaging Plan

By making regular, automated crypto buys over time, you smooth out price exposure instead of buying at peaks before crashes. Declining bitcoin prices mean your dollar cost average strategy automatically buys you more tokens at cheaper levels.

2. Hold Quality Assets Long-Term

Top cryptos like Bitcoin and Ethereum have weathered many cycles of boom and bust before reaching new highs. Have confidence to hold quality projects through bear markets, concentrating only on coins with strong infrastructure and real-world demand drivers.

3. Use Trailing Stop Loss Orders

Lock in gains as token prices rise towards all-time highs by using stop loss orders that follow upward movements. For example, if Bitcoin hits $25k, you could set a 10% trailing stop at $22.5k to sell if prices reverse lower.

4. Learn to Analyze Crypto Charts for Bitcoin Price

Technical analysis, support levels and chart patterns can all help determine better entry and exit prices. While TA can’t predict the future, not using tools like moving averages means buying and selling based more on emotions than data.

5. Maintain a Balanced Crypto Investment Portfolio

Don’t go “all-in” on crypto assets, regardless of your confidence in potential gains. By diversifying across stocks, bonds, real estate and other holdings, part of your portfolio should do well even during blockchain bear cycles.

Maintain a Balanced Crypto Investment Portfolio

6. Only Invest What You Can Afford to Lose

As a volatile emerging technology, be prudent with position sizing and only invest discretionary funds you won’t need for daily expenses. Conservative crypto allocation is key, like limiting exposure to 5% or less of your net worth.

Read more: Bitcoin Bonanza: Institutional Players and Crypto Futures Risk Management

7. Avoid Crypto Leverage and Futures Until Experienced

While derivatives like futures contracts can amplify gains, they also magnify downside when prices decline. Avoid leverage in bitcoin and altcoins until you have experience trading and stomach drawdowns during all types of market conditions.

8. Earn Yield on Crypto Holdings

Protocols like AAVE, Compound and Lido reward token holders with yields for staking or lending out their cryptos. This lets you earn annual rewards on holdings to offset any valuation declines during bear phases.

9. Stay On Top of Market Conditions and News

Making learning about blockchain trends and crypto news part of your daily routine will help you make informed decisions on which coins to invest in or sell based on projects’ long-term viability. Here are some best practices:

  • Subscribe to multiple crypto YouTube channels and podcasts covering both basic and advanced concepts from analysts, developers and industry experts
  • Follow cryptocurrency thought leaders, founders and developers on Twitter for the latest insights on projects
  • Join Reddit communities like r/cryptocurrency, r/Bitcoin and r/ethfinance to discuss market moves with fellow retail and institutional investors
  • Install multiple crypto news apps like CoinMarketCap and CoinGecko to get personalized phone alerts on price movements
  • Regularly check sites like Glassnode and Coinmetrics for on-chain data on token supply dynamics, exchange flows, miner behavior and other blockchain fundamentals
  • With crypto remaining extremely news-driven, using multiple sources prevents becoming trapped in “echo chambers” and makes you a more informed investor.

The recent volatility is a reminder of crypto’s risk, but isn’t unexpected for this emerging technology. By combining prudent position sizing, dollar cost averaging and continuous education, new investors can still thrive long-term even amidst bitcoin price turmoil.

Leave a Reply

Your email address will not be published. Required fields are marked *