I read about it and it's just human nature, all traders "fall" for that, including me.
I put "fall" in quotes, because it's not really a fallacy, it's fear, but it's not groundless fear: what goes up must come down, crypto investments are risky, you can gain a lot and lost a lot.
1st situation is FUD - Fear Uncertainty Doubt - I've heard that term a lot here, but it was directed towards people posting bad news about particular coin ("spreading FUD"), didn't know it affects coin holders directly.
2nd situation is bag holding - you can hold coin for a long time and it may eventually recover, but it may as well go to 0 or near it.
Now the problem is that I encountered both kind of situations and was wrong on 2 of 3 occasions - unfortunately, I made right decision only on the least profitable coin - I sold half of my holdings for a good price, then I watched it reaching ATH, then it went down and turned out to be a scam.
I put "fall" in quotes, because it's not really a fallacy, it's fear, but it's not groundless fear: what goes up must come down, crypto investments are risky, you can gain a lot and lost a lot.
- If you have an asset that goes up ⇗ you fear that it'll go down and you'll lose your profit - so you want to sell.
- If you have an asset that goes down ⇘ you hope that it'll recover - so you keep holding it.
1st situation is FUD - Fear Uncertainty Doubt - I've heard that term a lot here, but it was directed towards people posting bad news about particular coin ("spreading FUD"), didn't know it affects coin holders directly.
2nd situation is bag holding - you can hold coin for a long time and it may eventually recover, but it may as well go to 0 or near it.
Now the problem is that I encountered both kind of situations and was wrong on 2 of 3 occasions - unfortunately, I made right decision only on the least profitable coin - I sold half of my holdings for a good price, then I watched it reaching ATH, then it went down and turned out to be a scam.
Indeed true. The loss is temporary and that is already a reason to be patient and hold. Waiting is essential whenever extreme volatility is being experienced in the market. Some people in the cryptoworld are completely losing profit due to lack of patience and being eaten by panic as what have you experienced. Holding will more likely to result into profit since recovery is always expected to happen.