Let's say you have 100k in USDT that you want to invest, so don't invest all your money in bitcoin because you need a reserve budget. 20% of that is a pretty good amount as a reserve budget, even if you don't have enough later you don't need to sell all your bitcoin to cover your expenses. About whether you must have it or not, it depends on yourself and your financial condition. If you have more assets as property that can be sold instead of selling bitcoin, then you may have other options to avoid selling at loss.
The priority scale is basically very necessary for beginners because they cannot diversify the BTC they have because the amount is still small. If they do not have cash reserves will have an unstable level of investment stability, while selling bitcoin in a decline caused by the urgent need for cash in day-to-day fulfillment will make their investment amount slow and become unstable. Choices like this will sometimes interfere with investing for them because when building a holding they are faced with other needs that force them to sell bitcoins. It is much more appropriate if they also keep cash in savings and do not need to sell other assets as an option to avoid losses.
There are not really any problems to diversify out of some of your BTC in planned kinds of ways; however, at the same time, there are likely going to be needs to assess the extent to which BTC needs to be used for the various kinds of investments that you perceive to be important to your life or to persons within your circle. There surely could be cases in which selling some BTC on the way up would be justified and also justified in such a way to diversify some of your investments out of BTC - especially also when your BTC holdings might have appreciated to very high percentages in terms of your overall investments that you hold.. and for those kinds of reasons, you perceive it to be better to draw from you BTC rather than drawing from other assets or income sources or credit that you might have available to you.
Yes, I agree with you and as long as we diversify our BTC in the right way it is not a problem, for example on a trip we need money as a life support, so selling some of it will not make us lose money because it could be that the buying patterns we take are not all the same, so even though when the price is down we can still adjust the overall investment we have. But it would be nice if we had money in savings as a solution when we need money as a life support so that Hold's priority is not disturbed by the diversification of needs.
Especially for beginners who are just trying to add to their bitcoin holdings and when they need money they don't need to sell the bitcoin they have. This kind of discussion is important to provide a basic overview of the decisions that must be taken when faced with the same problem and especially for beginners who are just involved in investing.