After a significant drop, it is easy to act emotionally: start buying without a plan, use leverage, or follow questionable advice. That is why the first step should be to pause. The exception is margin and futures positions, where there is a risk of liquidation. These should be checked separately. Also make sure the decline is actually market-related and not caused by an account security issue. Unknown logins, changed account details, or withdrawal problems require immediate investigation. FINRA (Financial Industry Regulatory Authority) notes that crypto assets can involve high volatility and limited liquidity, meaning the risk of significant losses remains high.

Record:

• the current value of each position;
• its share of the portfolio;
• the average purchase price;
• the current drawdown;
• where the asset is stored;
• the original reason for buying it.

Also separate money you will need in the near future and any borrowed funds.

There is an important principle: −20% → requires +25% to recover −50% → requires +100% −80% → requires +400% So simply expecting the price to “come back” is not always a realistic strategy.

A 50% drop in an asset that represents 10% of your portfolio and a 50% drop in an asset that represents 70% of your portfolio are two completely different situations. That is why it is important to look not only at the number of coins you hold, but also at their allocation and correlation. Holding several tokens does not automatically mean you have a well-diversified portfolio. The key question: how would another major decline affect your financial plans?

1. Pause — don’t make decisions based on fear.
2. Security — check your accounts and access to your funds.
3. Numbers — calculate allocations, losses, and financial obligations.
4. Analysis — distinguish a broader market decline from problems specific to individual assets.
5. Plan — define the conditions for keeping or reducing each position.
6. Risk limit — set a maximum amount you are willing to allocate to crypto assets in advance.

A major drawdown is not automatically a signal to buy or sell. It is an opportunity to reassess your portfolio and regain control over your risk. First, understand the reasons behind the decline, assess your assets and financial situation. Only then make a decision.

A good plan is not about trying to predict the bottom. It is about being able to control risk when the market moves against you.