Bitcoin and cryptocurrency markets have experienced many cycles of growth and decline since their inception in 2009, even within the larger trends known as bull and bear markets. While each market dip has been followed by a recovery and significant growth, periods of decline can be stressful and hard to navigate for both experienced traders and beginning investors.

During a market dip, you might want to follow these five strategies in order to keep the value of your portfolio, avoid emotional trading, and lose less sleep.

# 1 – Don’t Fall Victim to FOMO and FUD

Keeping up with the latest news and trends in the cryptocurrency space is essential, but too much information can be damaging as well. This is especially true during market downturns when it’s all too easy to cave in to your instincts and make some poorly timed trades.

• FOMO and FUD term in crypto (fear, uncertainty, and doubt) are common terms in the crypto space, and they have a stronger impact on our options than we might realize.
• Negative market sentiment is generally caused by a rumor, an unfavorable news article, or a prominent individual expressing concerns about a particular market or asset. Traders may try to sell their holdings in anticipation of further price decreases, resulting in a negative effect on prices. FOMO, on the other hand, refers to a trader’s tendency to get carried away with fantasy after seeing positive price action or news, sometimes overlooking fundamental signals in a haste to get aboard the next rocket ship to the moon.

#2 – Establish Clear Goals, Diversify, and Only Trade Within your Means

Whatever your level of confidence in a particular asset, you shouldn’t invest more than you can afford to lose. The last thing anyone wants is to be caught in an emotional rollercoaster waiting for positive price action while their portfolio slowly drops in value.

• A savvy investor will also hold a variety of assets long-term to diversify their portfolio — from alternate cryptocurrencies to stock market index funds.
• Cryptocurrency is often said to never sleep. Since cryptocurrency markets are known for their volatility, crypto investors should predefine their trading strategies, as well as their entry and exit points, if possible.
• Even if you had all the information available, a sudden black swan event, hack, or tweet from a high-profile individual could cause prices to fall dramatically. It is therefore imperative that you take steps to mitigate your losses should a sudden crash occur.
• Investors might consider strategies like dollar-cost averaging (the act of buying and selling small amounts over a long period of time) that could help a crypto buyer avoid trading with their emotions or staring at charts all the time.

#3 – Think Long-Term and HODL

Even though the saying “it’s not a loss until you sell” is only partially true, it nevertheless carries some weight. Your unrealized losses are only realized when you sell your assets for less than your purchase price if their value has decreased since you bought them (called unrealized losses).

• On a long-term basis, Bitcoin has been trending upward over the years. Even if prices are falling as a result of a temporary market correction or a longer bear market, history shows that they will eventually recover due to economic factors like scarcity. Cryptocurrencies like Bitcoin are expected to rise in price over time due to their limited availability. Positive price movement can be viewed as temporary if your investing timeframe is on the longer side (years rather than weeks or months).
• It has proven to be a successful strategy to hold assets for a long time, with Bitcoin emerging as perhaps the most successful major asset in the past decade.