Trader Cuts Losses With AAVE and UNI, Sells $1.2 Million in Assets for a $360,000 Loss

Reflecting the nature of the cryptocurrency market in these challenging times, a trader by the name of 0xc61 has decided to exit both AAVE ($AAVE) and Uniswap ($UNI) and take a combined loss of $360,000.

This was a 7-hour-old decision in a market where holding a position has proved very precarious for this trader. They sold their entire $1.2 million holdings of UNI and AAVE, and I’m not going to lie; it sounds like a pretty rough experience to go through.

A Calculated Decision to Exit

For any investor, the decision to take a loss is never simple. Yet, it seems Trader 0xc61 reached a point where waiting for a price recovery in the two assets they had invested in was no longer tenable. With the overall market still swinging and the price of the two assets down significantly for an extended duration, this trader chose to cut their losses and stagger away from the scene. It was a clear acknowledgment of the risky nature of crypto trading and the even riskier business of holding onto assets that, by all appearances, are destined to continue downward.

The sale comprised 75,221 UNI tokens and 3,909 AAVE tokens, which the trader disposed of at prices much lower than their initial purchase prices. The assets had been held for various lengths of time, but the trader finally decided to divest in order to cut real losses. So now we know: 1. The tokens sold were UNI and AAVE. 2. The decision was made to sell. 3. The trade incurred substantial losses.

UNI Position: A $263,000 Loss

The first asset held in the trader’s portfolio was UNI, the governance token for the decentralized exchange platform Uniswap. During various stretches of bullish market activity, UNI had been a well-liked asset. Many traders were hopeful that its price would rebound after recent dips. But for this trader, the UNI experience was a 34-day hold that, well, held on too long. The price did not recover in a satisfactory manner, to a level that might have justified them keeping it in their portfolio.

Trader 0xc61 conducted a sale of 75,221 UNI tokens for 487,139 USDC, with an average price of $6.476 per UNI. This sale resulted in a loss equal to $263,000, a 35% drop from the original entry price. The sale decision seems to have been made on the basis that the price of UNI had remained stagnant and that it had failed to regain bullish momentum despite a market recovery for a bunch of other tokens. After having held onto the token for a period, the trader seemed to have been thinking that holding longer in hopes of a price rebound was now too risky and that it would be better to cut losses. The sale seems to have been made with the hope of not allowing the losses to deepen.

The loss on UNI constitutes a big part of the trader’s big drop in finances. The trader is now selling this coin at a loss, and they held it for what seems like a lifetime in the crypto world. This coin was supposed to be one of the good ones—trader was sure of it. And now, this coin is on the move in the opposite direction. Big oof.

AAVE Position: A $96,700 Loss

Besides the UNI position, the trader held 3,909 AAVE tokens connected to the decentralized finance (DeFi) lending protocol of the same name. The price of AAVE has fluctuated significantly over the past few months, which has made it a challenging asset for long-term holders. Like UNI, AAVE did not recover in the time frame that the trader had hoped for. And so, the trader sold the position at an average price not of $181.29 per token but of 708,681 USDC.

The AAVE position had a loss involved, which amounted to $96,700. That is a 12% loss from the entry price. The trader held this position for 12 days. They made the decision to sell and take the loss rather than hope for a recovery. They had some promise with the AAVE market initially. However, waiting an undetermined time for a potential recovery was too much to ask. Therefore, they scaled back and took a loss, resembling a cash-out of sorts.

Why Cut Losses Now?

Trader 0xc61 might have made the decision to sell at a loss based on a confluence of reasons. The market for cryptocurrencies is known for its vertiginous swings, and assets like UNI and AAVE can experience short-term price changes that are nothing less than breathtaking. In this case, the trader was likely faced with the not uncommon situation of having to make a decision on a trading position that had gone against him.

It’s also possible that the trader saw the overall precariousness of the environment, with a mix of macroeconomic and crypto-specific forces pushing against the price. After the breach of the past few weeks—quite a few former support levels have turned into resistance now—that’s left the bulk of the altcoin market in a twilight state of uncorrelated price action, with a few stubborn underperformers; hence, this move, which appears to preserve capital.

Conclusion: The Risks and Realities of Crypto Trading

Trader 0xc61’s choice to sever ties with UNI and AAVE in order to curtail losses demonstrates how cryptocurrency investing requires an ability to adapt and manage risk. The market can be wild: even the most seasoned traders can and do take losses. And sometimes, selling at a best-not-to-hold loss can be the smart decision when a position no longer looks like a winner (or when the quants suggest it won’t become one anytime soon). In this case, at least, 0xc61 looks like a savvy trader.

For those still holding assets in the volatile crypto space, this move is a reminder to carefully consider entry and exit points. In crypto trading, waiting for a recovery can sometimes feel long, and the sad reality is that some positions just don’t bounce back as expected. While taking a loss is obviously sometimes part of the game, the kinds of actions we take after realizing we’ve lost will really determine how successful we are in the navigating the crypto market’s ups and downs.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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