How Automatic Rebalancing Works

Rebalancing keeps your index aligned with the target weights you set, even as prices move. CryptoIndexBot uses threshold-based rebalancing.

What triggers a rebalance

Each asset has a target weight (say 50% BTC). As prices change, the actual weight drifts. When any asset drifts beyond your configured threshold (for example, more than 5% away from target), the bot rebalances: it sells what's overweight and buys what's underweight to restore your targets.

Why threshold-based?

Rebalancing only on drift — rather than on a fixed schedule — responds to real market moves and avoids unnecessary trades (and fees) when your portfolio is already close to target.

What you control

• Target weights — your strategy.
• Drift threshold — how tightly to track it. Common values are 3–10%.

The benefit

Rebalancing enforces a disciplined "sell high, buy low" behavior automatically and keeps your risk aligned with your plan. For a deeper explanation with a worked example, read Crypto Portfolio Rebalancing: What It Is and How to Automate It.