Bitcoin has recently hit multiple all-time highs, but it has also experienced several sharp drops. Experts recommend that investors should develop a reasonable profit-taking plan during bull markets to ensure that they can exit with profits at the peak. This article, written by DUO NINE YCC, is compiled, organized, and written by TechFlow.
Summary:
When the target price is reached, it is important to withdraw your initial investment.
The best time to profit seems to be between late 2024 and early 2025.
Sell at least 10% of your assets when the price increases by 10 times.
Take profits when the price is close to the historical high.
If you entered the market later, do not assume that making 10 times the profit is easy; it may not be.
Calculate 5 times/10 times/20 times based on the bottom price, not your entry price.
Do not sell all tokens if the cycle has not ended. Keep some assets in anticipation of price increases.
Some altcoins may never reach their historical highs due to token inflation. Liquidate all altcoins after the market has reached its peak.
Draft your profit-taking plan immediately and stick to it afterward.
Never sell all your bitcoins.
Content:
In this bull market, you can use two strategies to determine the exit timing:
The first is price-based.
The second is time-based.
Neither is better than the other, and using both can yield better results. Using only one may cause you to miss out on opportunities.
Below, I will explain each strategy separately and then apply these strategies to Bitcoin, Ethereum, and other altcoins.
Using price as an exit strategy:
I mainly use a price-based exit strategy for altcoins. This is because individual altcoins have their own smaller cycles and may not reach their peak at the same time as Bitcoin. Some rise quickly, while others rise slowly.
Waiting for Bitcoin or Ethereum to reach their peak may be a waste of time, as some altcoins may have already reached their peak before that. Therefore, remember that price is the key to ensuring profits. In any case, the goal is to fully exit altcoins several weeks after Bitcoin reaches its peak.
Here are the key moments when you should seriously consider taking profits:
When the price is close to the current all-time high.
When the price has risen 5 times, 10 times, 20 times, or more from the bottom (not measured by your entry price).
The following are illustrative examples.
The line charts below represent altcoins with different momentum and targets. FLOKI is a good example of a meme coin that can grow 100 times, RUNE is a reliable project that can grow more than 20 times in this cycle, and AAVE will perform well if it reaches its current all-time high or grows by about 10 times. Use this guide to evaluate altcoins in these three categories.
FLOKI
FLOKI has grown 65 times since the bottom. If you bought at a bear market price, you should have at least withdrawn your initial investment by now.
The current price is also close to the historical all-time high. It is best to take profits at this price and leave a small portion of funds to wait for new highs (if they occur). Buying here may make you a bag holder, so it is better to look for other opportunities.
RUNE
RUNE has risen 14 times from the bottom. If you haven’t withdrawn your initial investment yet, you should definitely do so when the price is close to the historical all-time high of $20. RUNE can further rise and set new records. By that time, your initial capital should have been fully withdrawn, and you would have made some profits. The remaining assets can be sold after Bitcoin reaches its peak.
AAVE
AAVE has just woken up after a long consolidation and has risen 3 times from the current bottom. Start taking profits gradually when the price reaches 5 times the bottom or around $300. AAVE may reach its historical all-time high, but its momentum is smaller compared to RUNE or FLOKI. Do not expect it to grow 65 times like FLOKI.
In case, keep some funds waiting for new historical all-time highs. Sell everything once Bitcoin reaches its peak.
Using time as an exit strategy:
Time refers to the cycle, and the cryptocurrency that sets the cycle in the cryptocurrency market is Bitcoin. If you don’t know, Bitcoin has a four-year cycle based on its halving schedule.
Halving has a huge impact on BTC’s price because it leads to supply shock = token reduction = price increase. According to history, Bitcoin has created new all-time highs after each halving.
However, something unusual happened this year!
Bitcoin hit a new all-time high before the planned halving in April 2024. This is because the approval of ETFs in January can be considered as an early halving event, leading to demand shock = index demand = higher prices.
Just yesterday, ETFs bought $1 billion worth of Bitcoin!
You should only consider profiting from BTC and ETH after specific halving events. Ideally, the price should be close to its peak about a year later.
However, due to the abnormality of Bitcoin ETFs, this cycle has accelerated. You could say that we have two halving events in 2024. One has created a demand shock, and the other will create a supply shock. They have collectively accelerated this cycle. If Ethereum also passes an ETF, this situation will be further intensified.
For this reason, if you start counting from January 2024, about a year instead of April 2024, you can consider that this bull market may peak in late 2024 or early 2025. Based on this, I believe that the period between October 2024 and March 2025 is a good time to take profits.
On this BTC chart, I marked the bull market from 2016 to 2017 in red, which lasted for two years, and the current bull market started in January 2023. When releasing this post, the price of BTC seems to be faster than the red cycle.
Interestingly, the top in 2017 matched my exit time. I don’t think Bitcoin will reach $1 million in 2025, but I would be surprised if it does. In any case, if the price ends the monthly candle below the yellow parabolic line, Bitcoin is likely to reach its peak there.
Once the price reaches our exit range, you should start selling. I recommend using Dollar-Cost Averaging (DCA) to exit:
Starting from October 2024, sell 15% each month or 4% each week. This will allow you to fully exit by the end of March 2025.
If the price of Bitcoin and Ethereum is higher than specific prices, especially if you have made life-changing profits, start selling earlier.
I mentioned earlier that combining price and time yields better exits. If, for some reason, Bitcoin exceeds $200,000 and Ethereum exceeds $10,000 before October 2024, I will start taking profits early. This cycle may be faster than expected!
Try to withdraw your initial investment and some profits. I plan to liquidate all my altcoins and Ethereum, and I may also sell some Bitcoin, which I hold from altcoin profits. Now, if I make 10 times the profit on an altcoin, I will transfer that portion of the profit to Bitcoin or Ethereum.
Afterward, when the price reaches our exit range or triggers the price, I will sell them.
I may also decide not to sell all of my Bitcoin. The only reason to speculate at the top of Bitcoin is to buy more later. But this is risky, and you may suffer losses. Never sell all your Bitcoin.
A similar prediction can be made for Ethereum based on the previous bull market, indicating that our exit window seems to be quite accurate. Interestingly, it also shows that Ethereum may far exceed $20,000. This is an optimistic scenario, but it may become a reality if Ethereum ETFs are approved this year.
Now is the time to develop your exit plan. If you want to exit this bull market successfully and satisfactorily, you need an exit plan. If you don’t have one, create one immediately. Success means following the exit plan, not reaching a specific dollar value.
Ask yourself, how much money do you want to make in this bull market? Set a goal, but make it realistic. Look at the value of your cryptocurrency portfolio today. What is it? Then multiply that value by 2 to 10. If you multiply it by 10, it may be unrealistic. If you multiply it by 2, you are likely to achieve the goal. Choose your range and risk preference. This is your price target.
If you don’t reach your goal within the time period from October 2024 to March 2025, seriously consider whether your price target is realistic. I think 2025 is likely to be the year this market turns into a bear market, so don’t delay too long once we enter next year. Take profits during the ascent. Exit using Dollar-Cost Averaging.
If you achieve your goal and follow the plan, you will exit this bull market satisfactorily. Control your greed, because as prices rise, you will be tempted to change your goal. That is the time you miss the exit.
Do not re-enter the market at the end of 2025 because of FOMO. If the market is at its peak, forget about it within one to two years. You can re-enter the market during the next bear market.