Bag holder
Trader stuck in a losing position, hoping for a reversal.
Beginner-friendly explanation
A bag holder is someone who keeps holding a crypto that has dropped a lot, hoping it will go back up someday. Often, they don't sell to avoid 'realizing' the loss, even if the project is dead or forgotten. Example: You bought a crypto at €1, it drops to €0.05 but you still hold it 'just in case.' You've become a bag holder.
Intermediate-level insight
A bag holder keeps a deeply losing position, often due to emotional biases like loss aversion or project attachment. They refuse to cut the loss, hoping for a rebound that never comes. Example: An investor holds tokens from a collapsed DeFi project down 90%, convinced the bull market will save them.
Advanced perspective
Bag holding reflects decision paralysis linked to ego, cognitive dissonance, or sunk cost fallacy. The trader becomes stuck in an illiquid position with poor fundamentals, hurting overall portfolio performance. Example: In a long-term portfolio, dead cryptos tie up capital because the trader won't close the loss, limiting recovery with better assets.
Psychology & Behavior
bag holder, losses, hope, attachment, cognitive bias, refusal to sell, stuck position, ego