Bitcoin is down about 15% from last month. Ethereum even more. Most altcoins are getting hammered worse. My portfolio value dropped noticeably over the past few weeks.
And you know what I’m doing about it? Not much. At least, not what most people probably think.
I’m not panic selling. I’m not “buying the dip” with money I can’t afford to lose. I’m not checking prices every hour. I’m definitely not posting dramatic takes on social media about where the market is headed.
Here’s what I’m actually doing, based on what worked during previous crashes and what absolutely didn’t.
What I Learned From Past Crashes
This isn’t my first crypto downturn. I was around for the 2022 crash. Watched my portfolio lose 60% of its value over several months. Made some good decisions and some terrible ones.
The terrible decisions: Panic sold some positions at the bottom because I convinced myself “it’s going to zero.” It didn’t. Those same positions recovered and went higher. I locked in losses unnecessarily.
The good decisions: Stuck to my rebalancing system. When my allocation got thrown off, I adjusted. Sold some of what pumped relatively less, bought more of what dropped harder. Maintained my target percentages.
That rebalancing approach forced me to buy when things were genuinely cheap, not just when they felt cheap. And it prevented me from having everything in one asset that could drop 80%.
The First Thing I Did This Time
When I noticed the market turning south, first thing I did was check my Layer 1 holdings – the core long-term positions in my hardware wallet.
Are they still there? Yes. Do I still believe Bitcoin and Ethereum will be worth more in 3-5 years than they are today? Yes.
Okay, then nothing needs to change with Layer 1. That layer exists specifically to weather volatility like this without reacting.
This sounds simple but it’s psychologically important. When markets crash, your brain wants to DO SOMETHING. Having a layer of your portfolio where the explicit rule is “don’t touch it during market movements” prevents a lot of bad impulse decisions.
What I’m Actually Adjusting
Layer 2 is where I take action during downturns, but not the action most people take.
My Layer 2 target allocation is 50% BTC, 30% ETH, 20% stablecoins. When crypto drops, that allocation shifts. Bitcoin might now be 45% because its value dropped. Stablecoins might be 25% because they held value while crypto fell.
When allocations drift more than 5% from targets, I rebalance. That means right now, I’m selling some stablecoins and buying more Bitcoin and Ethereum to get back to 50/30/20.
Psychologically this feels backwards. Bitcoin is dropping, and I’m buying more? Yes. Because my system is based on maintaining percentages, not predicting price movements.
The practical execution: I use instant swaps like Changeum.io to convert between assets. Sell some USDT, buy BTC. Sell some USDC, buy ETH. All wallet-to-wallet, takes maybe 20 minutes for each swap to process.
This is so much easier than it used to be. Previously, I’d need to deposit stablecoins to an exchange, trade, withdraw crypto. Now it’s direct conversions from my wallet. During market stress, the last thing I want is crypto sitting on exchanges waiting for withdrawals to process.
Why This Approach Works
Rebalancing during downturns forces disciplined buying when things are actually cheap, not just when they feel cheap.
When Bitcoin is up 50% and everyone’s excited, my system says “sell some BTC, buy more stablecoins.” I’m taking profits when things are high.
When Bitcoin drops 20% and everyone’s scared, my system says “sell some stablecoins, buy more BTC.” I’m buying when things are low.
This is literally the “buy low, sell high” advice everyone gives, but automated through allocation rules instead of trying to predict tops and bottoms.
The Math Makes It Unemotional
Here’s the beauty of this system: I don’t need to have an opinion on where prices are going.
Is Bitcoin going to $80k or $40k next? I genuinely don’t know. Nobody does, despite what they claim on social media.
But I don’t need to know. My allocation is off by more than 5%? Then I rebalance. That’s the only question that matters.
The math removes emotion. I’m not selling because I’m scared. I’m not buying because I’m greedy or excited. I’m just maintaining my target percentages like I do every month regardless of market conditions.
What I’m Not Doing
Just as important as what I’m doing is what I’m deliberately not doing.
Not checking prices constantly. I check maybe once a week right now. That’s it. Watching prices drop in real-time doesn’t help, it just creates anxiety and makes emotional decisions more likely.
Not trying to catch the exact bottom. People wait for the “perfect” entry point and either miss it entirely or freeze up when it arrives. Better to have a system that buys steadily on the way down than to try timing one perfect moment.
Not moving everything to stablecoins. Some people panic and convert their whole portfolio to USDT or USDC during crashes. Then they’re trying to time re-entry, which most people get wrong. Staying invested with proper allocation beats trying to time markets.
Not buying random altcoins because they’re “cheap.” Everything is cheaper in a downturn. That doesn’t make it a good investment. Stick to what you understand and believe in long-term.
Not borrowing or using leverage. Downturns are when leveraged positions get liquidated. If you need to borrow money to buy this dip, you’re over-investing.
The Layer 3 Decision
My speculation layer – the 5-10% of portfolio in higher-risk bets – gets special treatment during crashes.
I review each position and ask: Do I still believe in this project fundamentally?
If yes, it stays. Might even add to it if I have conviction and it’s gotten really beaten down.
If no, or if I’m uncertain, I cut it. Bear markets are when weak projects die. No point holding something you don’t believe in hoping it recovers.
This is where I’ve taken actual losses recently. Had a couple altcoin positions that I realized were just FOMO buys without real conviction. Cut them, accepted the loss, moved the remaining value into stablecoins to use for rebalancing Layer 2.
That hurts psychologically – realizing and locking in losses. But it’s better than holding something to zero because you can’t admit a mistake.
What Crashes Actually Create
Here’s the mindset shift that helps during downturns: crashes are when you build wealth in crypto, not when you lose it.
The losses you’re seeing right now are only real if you sell. If you’re holding good projects with a proper time horizon, this is just volatility. Uncomfortable, but not catastrophic.
What crashes actually create is opportunity. Opportunity to accumulate quality assets at lower prices. Opportunity to rebalance into better positions. Opportunity to buy what was too expensive last month.
People who made serious money in crypto generally did it by accumulating during bears and holding through bulls. Not by trading perfectly or timing bottoms, but by having the discipline to keep buying when it felt scary.
The 2022 Lesson
During the 2022 crash, I followed this same rebalancing approach. Month after month, as prices dropped, I kept selling stablecoins and buying Bitcoin and Ethereum to maintain allocations.
It felt terrible. Every purchase immediately went down more. I kept thinking “maybe I should just hold stablecoins until this is over.”
But I stuck to the system. And when the market eventually recovered in 2023-2024, those accumulation purchases made at lower prices did extremely well.
That experience taught me: trust the system, especially when it feels wrong. If your system is sound, following it during discomfort is exactly when it provides the most value.
Staying Liquid and Ready
One thing I’m making sure of: keeping my crypto accessible and in my control.
Everything stays in my wallets during downturns. I’m not leaving crypto on exchanges “just in case” I want to trade quickly. Market stress is exactly when exchange problems happen – withdrawals get suspended, platforms have liquidity issues, accounts get locked for “reviews.”
With my crypto in my wallet and instant swaps available for conversions, I can rebalance whenever needed without depending on exchange stability.
This gave me real peace of mind during the recent drop. I’m not worried about whether my exchange will let me access my crypto. It’s in my wallet. I control it completely.
The Psychological Battle
The hardest part of downturns isn’t the financial aspect – it’s psychological.
Your portfolio value dropping feels bad. Your brain interprets it as loss and wants you to do something to stop the loss. Usually that something is selling, which locks in losses and removes future upside.
What helps me:
Having a system removes decision-making. I don’t need to be smart or brave. I just need to follow the rebalancing rules.
Not checking prices constantly removes the emotional roller coaster. Can’t panic about hourly movements if you’re not watching them.
Focusing on actions not outcomes. Did I follow my system? Yes. Then I did what I could control. The market doing what it does is outside my control.
Remembering previous cycles. This isn’t the first crash and won’t be the last. Markets go up and down. Long-term holders weather both.
What Happens Next
Honestly? I don’t know if this downturn is over or just starting. Bitcoin could go to $60k or $40k from here. I have no insight into short-term price movements.
But here’s what I do know:
I’ll keep checking my allocations monthly. If they drift more than 5% from targets, I’ll rebalance. If Bitcoin drops more, that means buying more Bitcoin. If it recovers, that means taking some profits back into stablecoins.
Layer 1 stays untouched in cold storage regardless of what happens.
Layer 3 gets reviewed for anything that stopped making fundamental sense.
And I’ll keep my crypto in my own wallets where I control it, using instant swaps for any conversions I need to make.
That’s the plan. Not exciting, not dramatic, but it’s what worked before and what I’m trusting to work again.
If You’re Stressed Right Now
If this downturn has you anxious, ask yourself a few questions:
Are you invested with money you actually need in the next year? If yes, that’s the real problem. Crypto should be money you can afford to leave alone for years.
Do you have a system, or are you just reacting to price movements? Systems help. Reactions usually hurt.
Are you over-invested in things you don’t really understand? If you can’t explain why you own something, crashes are when you find out that was a mistake.
Is your crypto secure in your control, or are you dependent on platforms that might have problems during stress? Control matters most when markets are volatile.
Downturns reveal what was working and what wasn’t. If your approach is causing serious stress, maybe this is the time to simplify and build something more sustainable.
For me, that meant moving away from trying to trade or predict prices, and toward a systematic approach based on allocation maintenance. It’s boring, but boring works better than exciting when markets get volatile.
And right now, boring is exactly what I need.
Peyman Khosravani is a global blockchain and digital transformation expert with a passion for marketing, futuristic ideas, analytics insights, startup businesses, and effective communications. He has extensive experience in blockchain and DeFi projects and is committed to using technology to bring justice and fairness to society and promote freedom. Peyman has worked with international organizations to improve digital transformation strategies and data-gathering strategies that help identify customer touchpoints and sources of data that tell the story of what is happening. With his expertise in blockchain, digital transformation, marketing, analytics insights, startup businesses, and effective communications, Peyman is dedicated to helping businesses succeed in the digital age. He believes that technology can be used as a tool for positive change in the world.
