I just realized an interesting thing about investment psychology that most people encounter. That is, why holding onto losses is much easier than holding onto profits, and this often leads to costly mistakes in the crypto market.

First of all, what is holding onto losses? It’s when you keep your position despite the price being red, hoping it will recover. You’re afraid to sell and realize a loss, so you just sit and wait, wait, wait. Meanwhile, holding onto profits means selling when the price goes up, taking profits, and looking for new opportunities. It sounds simple, but in reality, it’s much more complicated.

There’s a pretty interesting biological reason behind this. Humans tend to fear losing what they already have more than missing out on new opportunities. When investing and losing money, the brain clings to any positive information to comfort itself, creating false hope. That hope makes us ignore other warning signals. So, what is holding onto losses in this case? It becomes a form of self-deception, a way to avoid facing the truth.

But wait, holding onto losses can also be correct if you understand the project well. For example, if a project has a solid foundation but its price has never surged significantly, and you know it has potential, then DCA and holding the coin is reasonable. Solana is a classic example. When SOL rose from $5 to $240, then dropped back to $100, many people sold out because they were afraid of missing profits. But those who understood the project held onto their coins and benefited much more.

There are some altcoins and NFT-Fi projects that seemed to have bottomed out, but when the market recovered, they increased 10-20 times. This depends on whether you have the skill to read and understand the market. If you lack technical analysis skills to determine the right stop-loss point, or don’t know how to distinguish between a rally and a rebound, these decisions can lead to significant losses.

When experiencing a 20-30% loss on a large investment, a passive mindset is normal. You might overlook the opportunity to exit, and eventually give up entirely. That’s when holding onto losses becomes a real psychological issue.

By the way, if you want to better understand how to make correct investment decisions, I usually follow detailed analyses on reputable platforms. Gate also offers many useful tools and data for tracking these projects.