I think rebalancing is a good approach, because this method is automatically reduce the risk.

For example, suppose we have $700 of bitcoin and $300 of altcoin. If bitcoin's value has a big drop, while altcoin's value remain steadily, our portfolio may change to $300 of bitcoin and $300 of altcoin. The bitcoin has 57% drop, and the total value has 40% drop.

If we want to recover our loss, we must wait until bitcoin has 133% growth. But if we sell part of altcoin to buy some bitcoin to have it's ratio rebalance to the initial state, maybe we just need 30% growth of bitcoin then our loss will be recovered.