Bitcoin volatility can never be avoided, but panic can be avoided with the right strategy and education. As you say, 'Investing by understanding your financial situation will reduce panic'. Yes, investing by understanding your financial situation reduces panic, but no matter how good the financial situation is, when the market price drops, some anxiety acts and the panic does not go away completely. And this is more the case with new investors. In this case, the DCA strategy is good to avoid panic. It protects against market fluctuations by investing regularly and systematically and helps to focus on long-term planning. As a result, the investor learns to remain calm without panicking.
For newbie to avoid panic when the market drops, they should only invest with little amount of money as low as $10 and above so that whenever there is a dip, they wouldn't panic but continue with their ongoing weekly DCA and be learning at the same time. With time as they continue investing and having experience of the market that if there is a dip, the price of bitcoin will bounce back. That will build their confidence the more. After one- or two-years investing experience and good confidence on bitcoin, they can increase their DCA amount and invest aggressively to cover up all those period that they lacked confidence in bitcoin.75
I disagree with you on this, there is no specific amount a newbie should invest in Bitcoin because if a newbie has a big or large discretionary and he or she feel that using a certain amount to be investing won't affect them, then it is advisable. What matters the most is capacity and capability, any newbie that has the capacity should invest but one thing that is not advisable is over aggressiveness because there is always a repacaution for that and so investor ought to invest within there reach.