Solana: −25.9% turned into −1.5%
The best illustration of how averaging works is not a diagram but a real position. Here is what happened to SOL over four months.
The entry
On 5 May the bot took over a position: 18.87 SOL at $135. Price then fell and by September traded around $100. For an ordinary holder that is −25.9% and the question of whether to wait or cut.
What the bot did
Instead of waiting, the bot kept buying — in proportion to the depth of the drawdown. The lower price went, the larger the purchase.
| 5 May | 1 September | |
|---|---|---|
| Quantity | 18.87 SOL | 39.20 SOL |
| Cost basis | $135.00 | $101.56 |
The position doubled in size and the cost basis fell by 24.8%.
The result
With the market at $100.03 the position sits at −1.51% instead of −25.9%. Turning profitable takes a +1.5% bounce, not +35%.
That is the whole point: we do not need a new all-time high. We need price to reach the cost basis — and the cost basis came down to meet it.
A drawdown stops being a problem once it works to lower your cost basis.
One caveat worth stating: the mechanic rests on the assumption that the asset recovers. That is why we only average spot, and only large caps — the ones that do not disappear.