Biotechs live off borrowed money, so the current environment isn't to their advantage. Once the Fed reverses its position things should start to improve in this sector. Until then you will do well with a few selected stocks, but most will suffer. You've already lost a lot on XBI. Ask yourself how you would feel if it goes down another 50% if you hold as opposed to how you would feel if it gains 50% after you sold. There's no good answer to your question as nobody knows for sure where it's going. Odds favor a little more pain, but how much?