Those who had invested in the crypto market for a while must have experienced the crazy ups and downs of the prices of tokens frequently.
The spike can be in the range of huge percentages, and so is the drop. The feeling resembles how one experiences when riding a roller coaster.
If one is affected by the huge changes, the result can be panic selling when it falls, and panic buying when it moons. Both are undesirable, as one may be making the worst decisions in such times.
However, this volatility is the very nature of the crypto market today, in 2021, and new investors are especially prone to reacting irrationally based on sudden price movements.
A well-thought-through plan before investing can help reduce those irrational trades tremendously. Making investment decisions only after understanding the fundamentals of the assets is one important step to take. Deciding early how much to take profit and stop loss is another. After carefully assessing the associated risk and benefit of a crypto asset, and if you still decide to invest in it for the long term, be open to seeing the fluctuations along the way, and be mentally prepared to ride it through (unless fundamental change drastically, and a re-assessment is needed).
The underlying reason for reacting irrationally after sudden price movement is often GREED. Greed often clouds the mind, and undesired reactions based on fear and greed can easily result when price changes.
I have learned to take things a little more calmly when prices turn against me. The way I do it is to lower my expectations AFTER making the decision to invest in the asset.
I only invest what I can afford to lose. And I sometimes remind myself to be contented with any gains exceeds that of what the bank or a stable investment instrument gives me.
Telling myself that I am happy beating 4% APY overall as a buffer is quite liberating. A good hodling crypto portfolio can easily exceed that, so there is no stress whenever I remind myself of my humble expectation.
This is certainly not meant to be financial advice, but just a sharing of how I am navigating through the volatility of the crypto market.
Do what is best for yourself.