The stop loss question - when do you sell to protect your capital?

I’ve been investing into crypto for a few years now and one of the most striking things is how poorly most folks protect their capital in situations when there are violent downward fluctuations. One of the biggest lessons I learn in crypto is that ‘surviving’ is critical - if you get wiped out, you will not be able to benefit from market upswings.

There seems to be an inherent bias towards ‘cutting losses’ - a lot of folks actually ‘double down’ or buy more during massive dips, which can be a good strategy in many cases, but the issue of trying to catch a falling knife (price just keeps going down after one buys) is very real, and obviously very painful psychologically.

I’m curious how folks here think about risk management and capital protection. Do folks have some sort of ‘stop loss’ where they sell a portion of their holdings in case market goes down more? At what point of downward price pressure is it ‘too painful’ to hold? And is there also an argument that if price drops too much rapidly, you’re better off holding and not selling at a low anyway?