Cryptocurrency Prices by Coinlib
What to do when the crypto market drops
TL;DR: When crypto drops, most holders face 4 choices: promote, maintain, purchase extra, or borrow towards what they've. The precise selection is dependent upon one query that comes earlier than all of the others: do you really want this cash within the subsequent 12 months? If no, promoting throughout a downturn is nearly by no means the optimum resolution. Nexo's crypto-backed credit line affords a fifth path most holders do not know exists: entry liquidity with out promoting your place.
The primary query: do you want this cash within the subsequent 12 months?
Not “would it not be helpful.” Not “would I really feel higher in money.” Do you could have a particular, near-term monetary obligation this cash must cowl?
If sure: promote. No framework adjustments that. The aim of conserving an emergency fund separate from crypto is strictly this example.
If no: promoting throughout a downturn is nearly by no means the optimum resolution. The remainder of this framework is for individuals in that second class.
The four-option framework
Possibility 1: Do nothing
Doing nothing is an lively resolution. It means you have confirmed your thesis is unbroken and that holding by way of the volatility is the correct name.
That is right extra typically than individuals realise. Bitcoin fell 83% between November 2021 and November 2022, recovering to a brand new all-time excessive of $125,071 in October 2025. Ethereum fell 81% over the identical interval and likewise recovered. As of April 2026, Bitcoin is once more in a drawdown section, down roughly 38% from that October peak.
Each main crypto asset that has survived its first 5 years has recovered from even its worst drawdowns. The query to ask earlier than selecting this selection: has something modified in regards to the cause you initially purchased? If the reply is not any, the basics are intact, the thesis is unchanged. Doing nothing is a defensible and infrequently optimum selection.
Possibility 2: Purchase extra
Greenback-cost averaging right into a declining market means shopping for a hard and fast quantity at common intervals no matter worth. Over time, this lowers your common value foundation and will increase your publicity at decrease costs.
This solely is sensible if two situations are met: you could have conviction within the long-term thesis, and you've got capital out there that is not wanted elsewhere. Shopping for extra by stretching your monetary place converts a calculated technique right into a harmful one.
Possibility 3: Earn on what you maintain
When you're holding by way of a downturn, your crypto can give you the results you want whilst you wait. Flexible Savings on Nexo earns day by day curiosity on Bitcoin, Ethereum, and stablecoins with no lock-up, that means you keep full entry to your funds whereas producing a return.
For stablecoin holders particularly, a downturn is usually the second when incomes makes essentially the most sense. Shifting a portion of your portfolio into USDC or USDT eliminates worth publicity whereas producing yield above most financial institution financial savings accounts. When the market recovers, you may transfer again into the belongings you need to maintain.
Possibility 4: Borrow towards your holdings
When you want liquidity however do not need to promote, a crypto-backed credit line helps you to entry money or stablecoins utilizing your Bitcoin or Ethereum as collateral. Your crypto stays in your account. If you repay, your holdings are absolutely unlocked.
The strategic logic is similar rich buyers have used with actual property and equities for generations: borrow towards appreciating belongings fairly than promoting them. Technique (previously MicroStrategy), which held roughly 528,185 BTC as of April 2026, has operated on this precept at scale, utilizing convertible debt to build up Bitcoin fairly than promoting holdings to fund operations. The identical logic applies at a person degree. The price of borrowing from 2.9% annual curiosity on Nexo for eligible purchasers is usually decrease than the chance value of promoting at a depressed worth and lacking the restoration.
Monitor your loan-to-value ratio. If the worth of your collateral falls additional, your LTV rises. If it reaches a threshold, chances are you'll want so as to add extra collateral or repay a part of the mortgage. Borrow conservatively and have a transparent reimbursement plan.
What to not do
Do not promote as a result of the value is falling. Value falling shouldn't be, by itself, a cause to promote. The query is whether or not your thesis has modified. If the reply is not any, a falling worth is noise.
Do not add to a place you may't afford to carry. Shopping for extra with bank cards, private loans, or cash earmarked for near-term bills converts a strategic resolution right into a monetary danger.
Do not transfer to stablecoins with no re-entry plan. Most holders who transfer to money throughout a downturn both re-enter too late or keep out totally and miss the following cycle. If you do not have a particular plan for when and the way you may re-enter, staying in your authentic place might be the higher resolution.
Wait 48 hours earlier than making any irreversible resolution. Many of the urgency you are feeling throughout a pointy downturn is emotional. Promoting is troublesome to reverse on the similar worth. When you're feeling acute strain to behave, wait.
Discover your choices on Nexo
Throughout a downturn, your crypto can nonetheless give you the results you want. Flexible Savings earns day by day curiosity on Bitcoin, Ethereum, and stablecoins with no lock-up. Fixed-term Savings affords greater charges for dedicated durations. And when you want liquidity with out promoting, Nexo's crypto-backed credit line offers you entry to funds from 2.9% annual curiosity, along with your crypto staying in your account as collateral.
Often requested questions
Ought to I promote my crypto when the market drops? Provided that you genuinely want the cash for a near-term obligation and don't have any different option to cowl it. If that is not the case, promoting throughout a downturn means locking in a loss and probably lacking the restoration.
What's dollar-cost averaging in crypto? DCA means shopping for a hard and fast quantity at common intervals no matter worth. Throughout a downturn, you purchase extra items for a similar cash, reducing your common value foundation over time. It really works finest for buyers with a very long time horizon and constant capital out there.
Can I borrow towards my crypto as an alternative of promoting throughout a drop? Sure. A crypto-backed credit score line helps you to use your Bitcoin or Ethereum as collateral to entry money with out promoting your place. On Nexo, borrowing begins from 1.9% annual curiosity for eligible purchasers.
What's LTV in crypto borrowing? LTV measures how a lot you have borrowed relative to the worth of your collateral. If Bitcoin's worth falls, your LTV rises. If it exceeds the platform's threshold, you may want so as to add collateral or repay a part of the mortgage. That is why borrowing conservatively issues most throughout unstable durations.