I just realized an interesting thing about the psychology of crypto investors. When assets increase in value, we tend to sell too early. But when assets decrease, we tend to hold on, waiting for a recovery. This phenomenon is called "holding losses" and "holding profits," and it greatly impacts our investment outcomes.

First, let's understand these two concepts clearly. Holding losses is when you continue to hold a position despite the declining value, hoping it will bounce back. Conversely, holding profits is when you quickly sell when prices rise, rushing to take profits instead of waiting for longer-term growth potential.

But why is the psychology of holding losses so much stronger? It's because human nature fears losing what we have more than missing out on opportunities. When money starts to decline, our brains cling to any positive signs, ignoring other risk warning signals. At this point, the false hope we create overwhelms objective assessment.

I've noticed that in the crypto market, many people fall into this trap. They lack the skills to read the market to distinguish between upward waves and retracements, and they don't know how to determine reasonable stop-loss points. When they are already down 20-30% on a large amount, a passive mindset becomes normal. Holding losses can lead to missing exit opportunities, eventually resulting in indifference toward the investment.

However, interestingly, holding losses isn't always wrong. It depends on whether you truly understand the project. If it's a quality project with real demand, you can DCA (Dollar Cost Averaging) and hold the coin for the next upward wave. Many altcoins, NFT-Fi tokens, have bottomed out during prolonged downtrends lasting several months, but when the market recovers, they can increase 10-20 times.

A classic example of this is Solana. When SOL rose to $5, then increased fivefold to $240, many investors sold when the price was only $100 because they thought they had made significant profits. But if they understood the project's potential, they could have held the coin for much larger gains.

So how can we avoid these mistakes? The most important thing is to understand the project you're investing in, as well as your market reading skills. Holding losses when you believe in the project's potential is a reasonable strategy, but holding losses out of fear and lack of understanding will lead to losses. The key is to have a clear plan, good risk management, and not let emotions dictate your investment decisions.