All coins have possible to decrease the price because many people see the price decrease they sell it and many people panic so the price decrease very deep and that's the reason why the crptocurrency is lose their money.
I don't think people should invest more than their loss capacity because we all know that the crypto market is a market that is very volatile and one can lose all its capital (I lost all my capital in the early days of my trade) even with just one mistake so people must always consider the risk profile before investing in crypto. Therefore the best way to manage the risk of investing in the crypto market is to avoid excessive investment.