💥💥 Understanding Theoretical vs. Realized Losses in Cryptocurrency 💥💥

Theoretical (Unrealized) Loss:

Occurs when the value of your cryptocurrency falls below the purchase price but you haven’t sold.

The loss remains unrealized, and there's potential for price recovery, meaning no actual financial loss has occurred.

Realized Loss:

Happens when you sell the cryptocurrency at a price lower than your purchase price, making the loss real and permanent.

Key Insight:

Holding long-term means the current decline is not an actual loss, as the market may recover, allowing for potential future profits.

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