By ginger perryupdated October 13, 2025
The cryptocurrency market has just gone through another “bloody week.” Bitcoin fell by double digits, altcoins followed, and Twitter was flooded with red charts and panic memes. If you’ve been in the market for a while, you know that volatility isn’t new: it’s the price we pay for outsized returns. But for newcomers, these sharp declines can trigger emotional decisions that hurt long-term performance. Understanding how to survive downturns in the cryptocurrency market is what separates experienced investors from panic sellers.
In this article, we’ll discuss how to stay calm during massive drawdowns, manage your risks step by step, and use smart strategies like dollar-cost averaging (DCA) to survive the storm and even come out stronger.
1. What constitutes a “bloody week” in cryptocurrencies?
A “bloody week” refers to a period in which cryptocurrency prices plummet across the board, often by 20% to 40% or more. These declines can be triggered by macroeconomic news, regulatory announcements, or simply self-correcting market overexuberance.
Unlike traditional markets, cryptocurrencies trade 24/7, meaning panic can spread quickly. Leveraged traders are liquidated, fear spreads across social media and retail investors rush to exit their positions. The result? A feedback loop of selling pressure, until strong hands step in and stabilize the market.
Understanding this cycle is key: volatility is not failure. It is a characteristic of a young, high-growth asset class.
2. The psychology behind panic selling
When markets fall, our brain interprets it as danger. Behavioral economists call this “loss aversion”: we feel losses twice as strongly as equivalent gains. Combine that with FOMO and social media noise, and you have the perfect storm for making bad decisions. To survive the falling conditions of the cryptocurrency market, investors must learn to manage these emotions before taking control.
This is what usually happens:
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Prices plummet.
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The media publishes pessimistic headlines.
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Investors panic and sell to “reduce losses.”
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The market recovers days later… without them.
The truth is that no one can consistently time the ups and downs. Instead of reacting emotionally, experienced investors rely on frameworks and discipline.
Ask yourself:
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Has the fundamental value of Bitcoin or Ethereum really changed?
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Am I selling out of fear or because my investment thesis is invalid?
Nine times out of ten it’s the first.
3. Step-by-step guide to managing risk during an accident
Risk management isn’t glamorous, but it’s what separates the survivors from the bag holders. Here’s a simple structure to protect your portfolio when the markets turn red:
Step 1: Know your exposure
Never invest money you cannot afford to lose. This golden rule sounds cliché, but it is the basis. Calculate your cryptocurrency allocation as a percentage of your total net worth (ideally less than 20% if you’re not a full-time investor).
Step 2: Use Stop Loss and Take-Profit Levels
Setting predefined output levels helps remove emotions from decision making. Modern platforms allow conditional orders that are automatically sold or rebalanced when prices reach the chosen threshold.
Step 3: Diversify assets
Don’t bet everything on a single coin, no matter how promising it may be. The balance between Bitcoin, Ethereum and some strong altcoins can smooth out volatility and reduce overall declines.
Step 4: Hold Stablecoins as a Buffer
Holding USDT, USDC, or other stablecoins during turbulent times allows you to strategically buy dips instead of panic selling at the bottom.
Step 5: Maintain a long-term perspective
Remove. Every major cryptocurrency crash in history (2013, 2018, 2022) eventually recovered. Timing the market is better than timing the market.
4. Smart averaging: turning volatility into an ally
One of the most effective strategies during bearish phases is dollar-cost averaging (DCA): investing a fixed amount on a regular schedule, regardless of price.
Here’s why it works:
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It eliminates the emotional burden of trying to buy the perfect dip.
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Reduces the impact of volatility by spreading your inputs over time.
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Develop discipline and consistency.
Example: instead of investing €1000 at once, you could allocate €100 every week. When prices go down, you automatically buy more coins at cheaper prices; when they increase, you buy less, averaging out your cost base.
Many professional investors automate this process on platforms that support scheduled purchases and portfolio tracking. By committing to a plan, you move from reacting emotionally to following data-driven logic.
5. Stay sane during the chaos
Beyond strategy, surviving a bloody week is also a matter of mentality.
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Disconnect from social media if it amplifies your anxiety.
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Review your goals: are you investing for months or years?
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Educate yourself: the more you understand the mechanics of the market, the less fear will control you.
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Remember the cycles: cryptocurrencies have always rewarded patience and punished panic.
Volatility is the toll paid for innovation. Those who endure it are usually the ones who later celebrate it.
Final thoughts
The “bloody weeks” test the discipline of each investor. But if you manage risk properly, stay emotionally anchored, and apply long-term strategies like DCA, you can survive periods of cryptocurrency market declines and even turn these declines into opportunities instead of disasters.
The next time the charts turn red, don’t rush to sell. Take a deep breath, review your plan, and remember: the market rewards patience, not panic.
