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Crypto investments are a wild ride. In order to give yourself a chance of success, it is important to consider not only about buying but also selling cryptocurrency.
Now, when dealing in stocks, you tend to purchase and hold for a minimum of five years. But crypto is an entirely different ballgame. The conventional rules do not apply in this volatile market. So, read on to know more about the right time to sell or not sell cryptos.
When is the right time to sell crypto?
You need to consider a few situations before selling a crypto investment:
- The value became double or triple of what you bought it at:
If the investment has risen in value, your Bitcoin Trader would suggest you to sell a part of it. For instance, you need to sell what you actually invested. Then, you are basically playing with the house money as you move forward.
Because of the volatility of crypto, profits tend to disappear quickly. You need to take at least a part of the profits as a hedge against potential future losses.
- You have stopped believing in the long-term success of crypto:
Knowing how to cut the losses is a crucial part of crypto investments. It can be hard because people are usually highly passionate about the cryptos they purchase. Thus, it is necessary not to be too attached to a project. Given below are the signs that a crypto might on its way down –
- There is not much development underway
- You are doubting the management team and their work
- The community supporting the crypto keeps getting smaller and smaller
- You have landed much better investment opportunities:
Blockchain tech and cryptos are rapidly advancing. Back when Litecoin (LTC) was launched in 2011, it was a major improvement on bitcoin (BTC) when it comes to transaction processing. However, several new cryptos have come up ever since that are even better than Litecoin.
If other cryptos have edged past your present crypto holdings in the key areas, selling would be a good idea. You will get out right before the loses pile up and free up your cash to invest in other profitable pursuits.
When shouldn’t you sell cryptocurrencies?
There are no specific rules as to when not to sell cryptos. The one thing that you need to remember in this case is that you should not panic-sell simply due to a price drop. Hold on to it when you think it has some long-term value.
In fact, panic-selling is something crypto investors tend to regret later. They purchase crypto when it is at a high, and sell it when the price plummets. Eventually, they miss out when the price bounces right back. When the price drops and you don’t think that crypto is a good investment, you can sell. But don’t let the price drop be the sole reason to sell.
And now you know when to sell cryptos and when to stop yourself. So, are you going to sell now or not?