Have you ever wondered when and why you should ever cut losses instead of holding NFT?
First of all, cutting losses all the time is generally not good. It means you have accepted the fate that you are going to lose money on this trade.
Second of all, you should always have a reason why you are going to cut this bag off. Have you lost conviction in them? Are they moving too slow? Is there another opportunity that may move faster than the current bag you’re holding?
Cutting losses allows you to use that liquidity that you get back from the bad trade into another that might move a lot faster. Therefore making you breakeven from the loss and potentially profit as well.
Reasons that you have to consider before cutting loss.
For builder projects,
1. How long have you been holding?
2. Is the team behind the project still active?
3. Do you still believe in them?
4. Are the devs of the project still building?
5. Taking too long to build?
For projects that needs the community to carry. = project isn’t developing any unique utility and is just base on sick art like COC.
1. How long have you been holding?
2. Is the community still strong?
3. Are people still talking about the project?
4. Providing value?
To me at least, there is no point in holding a NFT for so long. Unless you have super huge conviction in them. I will generally hold projects that are building and providing value to holders / space longer than a project that have nothing and just based off hype.
We have seen a shit ton of projects that is based off hype flopped so hard after a few days.
In conclusion, always have a reason to buy something. Having a reason when you buy something off secondary puts you in a lower risk of losing money. Unless you’re a degen.
There will be A LOT lesser bags to cut off when you know what you are doing. Don’t randomly ape into things unless you know you have money to burn. Nothing lasts forever. One of your bags in profits now can be something you ended up cutting loss on.
