Watching major cryptocurrencies like ADA (Cardano) and XRP (Ripple) decline by over 85% can be unsettling, especially for those new to the crypto space. Such significant price drops often trigger doubt, fear, and confusion about whether to hold, sell, or buy more.
This article breaks down key considerations and strategies for dealing with severely depreciated assets—helping you make rational, informed decisions rather than emotional ones.
Understanding Market Cycles and Volatility
Cryptocurrency markets are known for their extreme volatility. Major price swings—both upward and downward—are common. Assets like ADA and XRP are no exception; they have faced sharp corrections in the past, followed by periods of recovery.
It’s essential to recognize that market cycles consist of bull and bear phases. During bear markets, even strong projects can see steep declines. However, historical trends show that quality assets often rebound when market sentiment improves.
Evaluating the Fundamentals: Are ADA and XRP Still Strong?
Before deciding whether to hold or sell, assess the fundamental strength of each project:
Cardano (ADA) is known for its research-driven approach, peer-reviewed technology, and strong development activity. Its consistent code updates and long-term roadmap suggest ongoing commitment and potential for future adoption.
Ripple (XRP) aims to facilitate fast, low-cost international payments. Despite regulatory challenges, it maintains partnerships with financial institutions and continues to develop use cases in cross-border transactions.
If a project demonstrates real-world utility, active development, and a clear vision, it may be worth holding—or even accumulating—during price dips.
Common Emotional Traps in a Downturn
Many investors make costly mistakes during market downturns:
- Panic Selling: Selling at a loss out of fear, often near the bottom.
- Hope-Based Holding: Holding indefinitely without a clear strategy or exit plan.
- Emotional Averaging Down: Buying more without evaluating whether the investment still aligns with their goals.
Avoid these pitfalls by sticking to a predefined strategy and focusing on long-term fundamentals rather than short-term price movements.
Strategic Approaches for Depreciated Holdings
If you’re holding ADA or XRP after a significant drop, consider these strategies:
1. Dollar-Cost Averaging (DCA)
Instead of trying to time the market, invest fixed amounts at regular intervals. This reduces the average entry price and minimizes the impact of volatility.
👉 Learn how to implement DCA like a pro
2. Rebalancing Your Portfolio
If ADA or XRP represents too large a portion of your portfolio, consider selling a portion to reinvest in other promising assets. This helps manage risk and maintain diversification.
3. Setting Clear Exit Criteria
Define under what conditions you would sell—for example, if the project’s fundamentals deteriorate, or if a specific price target is reached.
4. Hedging with Stablecoins or Other Assets
During periods of high uncertainty, moving some funds into stablecoins can protect your portfolio from further downside while you wait for a clearer trend.
When Cutting Losses Might Be the Right Choice
Not every asset recovers after a crash. Consider selling if:
- The project shows clear signs of failure, such as loss of key developers, halted development, or regulatory bans.
- You need the funds for more promising opportunities or personal emergencies.
- The investment no longer aligns with your risk tolerance or financial goals.
FAQ: Holding ADA and XRP After a Major Drawdown
Q: Should I buy more ADA or XRP after an 85% drop?
A: If you believe in the long-term fundamentals and have a risk-managed strategy like dollar-cost averaging, buying during downturns can be profitable. Always ensure it fits within your overall portfolio allocation.
Q: How long does it usually take for coins like these to recover?
A: Recovery time depends on market conditions, project developments, and broader adoption. It can take months or even years. Patience and a long-term perspective are key.
Q: What are the signs that a project like ADA or XRP might not recover?
A: Watch for reduced development activity, loss of major partnerships, ongoing regulatory issues, or declining community engagement. These can indicate deeper problems.
Q: Is it better to hold or diversify into other cryptocurrencies?
A: Diversification is generally wise. If most of your portfolio is in one or two assets, consider spreading risk across other established or high-potential cryptocurrencies.
Q: How do I manage the emotional stress of seeing such large losses?
A: Avoid constantly checking prices. Focus on the technology and real-world use cases rather than short-term pricing. Stick to your investment plan and avoid making impulsive decisions.
Q: Can staking or lending help during a bear market?
A: Yes. earning passive income through staking ADA or lending XRP can provide returns while you wait for the market to recover, reducing the opportunity cost of holding.
Conclusion
An 85% drawdown is severe, but it doesn’t necessarily mean the end for ADA or XRP. Your decision to hold, buy, or sell should be based on:
- A clear assessment of the project’s fundamentals
- Your personal financial goals and risk tolerance
- A strategic approach such as DCA or portfolio rebalancing
Emotional reactions often lead to poor outcomes. Instead, focus on rational analysis, patience, and disciplined execution. Whether you choose to hold or move on, ensure your choice aligns with a well-thought-out investment strategy.
Remember: successful crypto investing requires both conviction and flexibility. Stay informed, stay calm, and don’t let short-term volatility undermine your long-term vision.