What averaging down actually does
Buying more of something that has fallen lowers your average entry, which lowers the price you need to get back to level. It does not make the position safer. You now own more of an asset that has been going the wrong way, so the same percentage move costs you more money than it did before.
The average is weighted by size, not by how many times you bought. Two buys of 0.25 at $60,000 and 0.5 at $52,000 average to $54,666.67 — much closer to the second price, because the second buy was twice as large. That is the number most people get wrong when they do it in their head: they split the difference and land on $56,000.
Questions people ask
Does it work for averaging up?
Yes. The maths does not care which direction the price moved between buys — enter them in any order and the weighted average comes out the same. The name is just the more common case.
Should I include fees?
For a true cost basis, add each buy's fee into the price you enter for that row. On a 0.1% fee, a $60,000 buy has an effective price of $60,060. It rarely changes the decision, but it is the number your exchange has recorded.
Only five rows?
Five covers almost every hand-managed position. If you have more buys than that, combine the small ones: enter their total spend divided by their total units as a single row, which is exactly what the calculator would do with them anyway.