There is always the question of whether you are holding the right coins in your portfolio, especially after Monday’s significant bear trap drop. While some coins have recovered strongly, others have not recovered well. The House of Crypto host explained and discussed whether it is time to sell underperforming coins and invest in better options.
Recent market changes influenced by central banks’ attempts to weaken the dollar could mean that the worst is over and prices could start rising again. He said that while coins like Solana and Casper have made a strong comeback, others like Atom and Fetch.ai have not. This raises the question of whether one should sell coins that are not performing well and invest one’s money in coins that are recovering.
What is the sunk cost fallacy?
The host also talked about the sunk cost fallacy, which is the tendency to hold on to losing investments because the money has already been spent. He advised that if a coin is unlikely to recover, it might be better to sell it and invest in coins with strong growth. For example, meme coins that are losing popularity might be better swapped for ones that are gaining traction, such as Dogecoin. He pointed out that while some coins might recover in the future, their 7-day charts are currently showing no signs of improvement.
While some areas like DeFi may not be seeing strong growth right now, they could perform well later in the bull market. For example, HBAR has seen a slight recovery.
The analyst also said that some coins, especially meme coins, may be too far gone to recover. If you have been holding on to poorly performing coins, it may be better to sell them and invest in coins that are currently gaining traction. For example, Octo Gaming has been on a roll recently, and investing in such coins could help you recoup losses.