Dear adeelfaisal,
Huffte's recommendation is perfect. I have an additional comment, stiffness degradation is often reported as an average value at constant drift limits, for static cyclic column, joint, member tests.
For clarity of what I mean, look at Figs. 10 & 11 of the below paper:
Esmaeeli, E., Barros, J.A.O., Sena-Cruz, J., Fasan, L., Prizzi, F.R.L., Melo, J., Varum, H., Retrofitting of Interior RC Beam-Column Joints Using CFRP Strengthened SHCC: Cast-in-Place Solution, Composite Structures (2014), doi:
http://dx.doi.org/10.1016 j.compstruct.2014.12.012
Stiffness degradation is often reported at constant drifts and as you guess it should be decremental. For column cyclic tests, constant drifts are applied (e.g. 0.25%, 0.5% up to 6% for instance). And since usually at each drift ratio, 2 to 3 cycles are applied, in order to report the stiffness degradation, they average the stiffnesses at corresponding drift ratios.
I am not so sure about my understanding of what you're exactly doing, however, similar procedure should work for you, but instead of drift, you can use cycles on x-axis, as recommended by Huffte. From a dynamic time history analysis you get a hysteresis behavior, similar to Fig. 7 of the abovesaid paper. Your hysteresis curve is smilar, except it is not symmetrical.
And regarding the positive and negative, YES, you should consider the average on both positive and negative, even if your link element hysteresis is unsymmetrical (you apply ground motion, not predefined drift ratios!). Your illustration seems ok, except sign conventions that I feel are wrong.
And I DO recommend you reading the below paper, on how to extract strength degradation and cumulative damage. What you are referring to (stiffness degradation) is a form of damage accumulation (providing hysteresis capacity):
Wang, D., Li, H. N., & Li, G. (2013). Experimental tests on reinforced concrete columns under multi-dimensional dynamic loadings. Construction and Building Materials, 47, 1167-1181.
Hope this helps and good luck on your work.
PS: one non-related additional comment: introduction of a very small value for strain hardening of the reinforcing bar, usually dramatically helps the numerical convergency of highly nonlinear models under dynamic time history analysis. I learned it in the hard way.