One should always have a "line in the sand" stop loss level where you sell everything immediately without question or emotion to prevent this psychology. Having an automatic stop loss cuts out any possibility of letting emotions take over.
Exactly. If you use stopp losses properly you dont need to worry that shit ever hits the fan 
The hard part is to know at what level you should set the stopp loss, especially for crpyto trades which are way more volatile than traditional stocks. A too tight stopp loss may shake you out of the roller coaster too soon, often right before the upward movement.