How not to scare yourself into selling during a crash

I still remember the feeling of the 2022 downturn. Every day I opened the account, the number had shrunk another notch. At first I told myself it was fine, it would bounce; the further it fell the more I started questioning everything, lying awake at night staring at my phone. In the end I sold off a batch at a very low level — not because I'd thought it through, purely out of fear, because I couldn't take it anymore. In hindsight, if I hadn't sold that batch, it did come back later.

The biggest lesson from that wasn't “I picked the wrong coin,” it was that I simply wasn't prepared to face a crash at all. This piece is meant to walk you through that ahead of time, so that when the day really comes, you don't end up like I did — pushed by emotion into the move you'll regret most.

First, accept it: a 30% drop is normal

A lot of newcomers panic because they treat a crash as “something went wrong.” In fact, in this market, big drops aren't accidents, they're daily life. A 30% drop within a year is routine; in a true deep bear, drops of seventy to eighty percent have happened.

Feel it with real data: after bitcoin touched a high of about $69,000 in November 2021, it fell to about $15,500 by November 2022 — a drop of about 77% (Source: CoinGecko). And that's bitcoin — the largest by market cap and the most fall-resistant. Small coins over the same stretch only fell harder.

I put this at the very front because your understanding decides whether you panic. If you know in your bones that “a 30% drop was always going to happen,” then when it does, your reaction is “here it is,” not “it's over.” Treat a crash as a guest who arrives on schedule, rather than a sudden disaster, and you've already won half the battle.

Whether you can hold is mostly about position

Before talking emotional management, I have to pour a bucket of cold water: whether you can ride out a crash was mostly decided before the fall — it depends on whether what you put in was genuinely spare money.

The logic is plain. If you invested money you can afford to lose, then it falling by half leaves your rent paid and your life unchanged, so of course you can hold — there's nothing forcing your hand. But if you bet money you shouldn't have — next month's rent, your kid's tuition, borrowed money — then no emotional technique can save you, because the position itself is forcing you to sell, and that has nothing to do with how strong your nerve is.

So “being able to hold” traces back to the first two pieces: how much to invest sets the cap, and core and satellite sets the layering. Get the position right and a crash is merely uncomfortable; get it wrong and a crash is a disaster. This is exactly why I keep saying real risk control isn't done during the fall — it's done before you buy.

Emotional first aid during a crash

Suppose you got the position right and invested spare money. Even so, when it really falls you'll still hurt, still itch to act. Here are a few dumb methods I've tested on myself that work:

• While it's falling, make no major decisions. This is the most important one. Decisions made at the peak of emotion are, in hindsight, almost always wrong. First admit “I'm in a bad state right now,” then touch nothing.
• Close the market app and step away from the screen. The more you stare, the more you panic; the more you panic, the more you want to act. The best thing I could have done back then was toss the phone aside and go for a walk. Nobody can stand watching a green number tick down second by second.
• Stretch out the time scale. Don't look at how much it fell today; look at how long you originally meant to hold. If you were always holding for a year or two or longer, then one week's crash, on that scale, isn't really that important.
• Having accepted the worst case in advance, you won't panic on the spot. If you thought before buying “this thing could fall seventy or eighty percent,” then when it really does, you're “within expectations,” not “caught off guard.” Panic, much of the time, comes from never having imagined it could go this way.

None of these sound clever — they almost sound like platitudes. But during a crash, what a person needs has never been clever technique; it's one simple action that lets you “stop first, don't flail.” Hold still and you've already dodged the mistake most people make.

Time to trim, or just scared?

Of course, “don't act” doesn't mean “hold through anything no matter what.” Sometimes you really should trim. The key is to tell apart: is this genuinely time to trim, or are you simply scared? In the moment of a crash these two feel identical, but they're fundamentally different.

I use one question to tell them apart: besides the price falling, has anything substantive changed?

• Logic changed → trim. If the reason you bought it has been overturned — the project hit a major problem, the thesis was disproven — then trim, and trim regardless of whether it's falling. That's judgment, not fear.
• Logic unchanged, just an ugly price → you're scared. If nothing substantive has changed and it's purely the falling number frightening you, then that's fear talking, not a reason to sell. Selling here is the textbook “panic-sell,” and after it you usually get the bounce.

Pulling “logic” and “price” apart is a hard rule I set for myself afterward. The batch I sold at the bottom back then, looking back, had not a single point of its logic changed — I was purely scared by the price. If I'd been able to calmly ask myself that one question at the time, I probably wouldn't have sold. This distinction is the same as the give-up line in the exit rules piece — admitting you're wrong watches the logic, panic-selling watches the price. That's the whole difference.

Recap: don't make the heaviest decision at your most panicked

This piece, condensed to one sentence: during a crash, the best thing to do is often to not decide first. Accept that a 30% drop is normal, get the position right so you have the nerve to hold, close the app and leave the screen while it falls, and use the one question “has the logic changed?” to tell trimming from being scared.

All this risk-control stuff looks like useless homework in normal times, and only shows its real value during the crash days. Everything you prepared in the earlier pieces is so that, at your most panicked moment, you can still be a clear-headed person. Survive those few days and you've already gone much further than most.