How do you personally separate a long-term hold from a bag you're just refusing to sell

How do you personally separate a long-term hold from a bag you're just refusing to sell

I’ve been thinking about this more lately, especially with borrowing against crypto becoming more common.

For me, the hardest part is being honest with myself. There are coins I hold because I actually believe they will still matter in a few years, and there are coins I hold because selling them would mean admitting I was wrong.

The rule I started using is pretty simple:

If I can explain why I still want to hold it without mentioning my entry price, it might be a long-term hold.

If my main reason is “I’m down too much to sell now,” then it is probably just a bag.

I’ve done both. With BTC and ETH, I’m comfortable holding through bad markets because I know why I bought them. I’m not just waiting to get back to my average. I've also borrowed against them before on nexo when I wanted liquidity without selling, but that only makes sense to me with assets I actually keep long term.

With some older alts, it was different. I realized I wasn’t investing anymore. I was just waiting for a random pump so I could escape at breakeven. No real thesis, no conviction, no plan. Just stubbornness.

The other test I use is whether I would buy it today at the current price. Not with the money I already lost, but fresh money. If the answer is no, then why am I still pretending it is part of my long-term portfolio?

Borrowing made it obvious for me, I’m fine borrowing against assets I genuinely want to keep. I’m not comfortable borrowing against coins I secretly know I should have sold months ago. That is how you turn one bad decision into two.

Do you have actual rules for this?