Bitcoin Breaks New All-Time High: How to Develop a Rational Profit-Taking Strategy?
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Bitcoin Breaks New All-Time High: How to Develop a Rational Profit-Taking Strategy?
Never sell all of your Bitcoin.
Navigating Web3 tides with focused insightsAuthor: DUO NINE⚡YCC
Translation: TechFlow
Bitcoin recently broke past its previous high of 69,000 and even reached a new all-time high of 73,000. As the market heats up, it might be time to plan ahead for when to take profits.
Summary
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When key price targets are reached, always recover your initial investment
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The optimal profit-taking window appears to be between late 2024 and early 2025
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For every 10x increase in price, sell at least 10% of your holdings
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Take profits as prices approach all-time highs
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If you entered late, don't assume achieving 10x is easy—it may not be
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Use the bottom price to calculate 5x/10x/20x gains, not your entry price
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If the cycle isn’t over, don’t sell all your tokens. Keep some to benefit from further upside
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Due to inflationary tokenomics, some altcoins will never reach new all-time highs
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After the market peaks, liquidate all altcoins
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Draft an exit plan immediately and stick to it
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Never sell all of your Bitcoin
Main Content
In this bull market, you can use two strategies to determine your exit timing:
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The first is price-based
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The second is time-based
Neither strategy is superior on its own—using both together yields better results. Relying on just one may cause you to miss major opportunities.
Below, I’ll explain each strategy separately and then apply them to examples involving Bitcoin, Ethereum, and other altcoins.
Using Price as an Exit Strategy
I primarily use price-based exits for altcoins. This is because individual altcoins have their own mini-cycles and do not peak simultaneously with Bitcoin. Some rise quickly, others slowly.
Waiting for Bitcoin or Ethereum to peak could be a waste of time, as many altcoins will have already peaked beforehand. Therefore, focusing on price is crucial to securing profits. Regardless, the goal is to fully exit altcoins several weeks after Bitcoin reaches its top.
Here are key moments when you should seriously consider taking profits:
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Price approaches current all-time highs
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Price has increased 5x, 10x, 20x or more from the bottom (not measured from your entry price)
Next are illustrative examples.
The following charts represent altcoins with different momentum and potential. FLOKI is a great example of a meme coin that could grow 100x, RUNE represents a solid project capable of rising over 20x in this cycle, while AAVE would perform well if it reaches its current all-time high or achieves around a 10x gain. Use this guide to evaluate your altcoins across these three categories.
FLOKI
FLOKI has surged 65x from its bottom. If you bought at bear market prices, you should have already recovered your principal.
Now the price is also approaching historical highs. It’s best to secure partial profits here and leave only a small portion to chase new highs (if they occur). Buying here makes you exit liquidity—better to seek other opportunities.
RUNE
RUNE has risen 14x from its low. If you haven’t yet recovered your principal, you definitely should when the price nears $20—the current all-time high. RUNE could certainly go higher and set new records. By then, your initial capital should already be out, along with some profit. The remainder can be sold after Bitcoin peaks.
AAVE
AAVE has just woken up after a long consolidation and has already risen 3x from its current bottom. Begin gradually taking profits once the price reaches 5x the bottom—or around $300. AAVE may reach its all-time high, but with less momentum compared to RUNE or FLOKI. Don’t expect 65x growth like FLOKI here.
Leave a small portion aside just in case it hits a new all-time high. Once Bitcoin peaks, sell everything.
Using Time as an Exit Strategy
Time means cycles, and in crypto, Bitcoin defines the cycle. If you didn’t know, Bitcoin operates on a four-year cycle based on its halving schedule.
Halvings have a massive impact on BTC’s price because they create a supply shock—fewer tokens available—leading to higher prices. Historically, Bitcoin has set new all-time highs after each halving.
However, this year is unusual!
Bitcoin hit a new all-time high before its scheduled April 2024 halving. This is because the January approval of ETFs can be seen as an early halving event, creating a demand shock—increase in demand—driving prices higher.
Just yesterday, ETFs purchased $1 billion worth of Bitcoin!
You should only consider taking profits on BTC and ETH after the halving event within a given cycle. Ideally, about a year later, when prices are nearing their peak.
However, due to the abnormal situation with BTC ETFs, this cycle has accelerated. You could say we’re experiencing two halving events in 2024. One created a demand shock, the other will create a supply shock. Together, they’re accelerating the cycle. This effect would intensify further if Ethereum also gets approved for ETFs.
Because of this, if you start counting roughly one year from January 2024 instead of April 2024, you could expect this bull market to peak by late 2024 or early 2025. Based on this, I believe the ideal profit-taking window is between October 2024 and March 2025.
On this BTC chart, I’ve marked the 2016–2017 bull run in red, which lasted two years. The current bull market began in January 2023. At the time of writing, BTC’s price trajectory appears faster than the red cycle.
Interestingly, the 2017 top aligns with my proposed exit timing. I don’t think Bitcoin will reach $1 million by 2025—but I’d be pleasantly surprised if it did. In any case, if monthly candles end under the yellow parabolic curve, Bitcoin is likely peaking there.
Once prices enter our target exit range, you should begin selling. I recommend using dollar-cost averaging (DCA) to exit:
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Starting October 2024, sell 15% per month or 4% per week, allowing full exit by end of March 2025
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Start earlier if Bitcoin and Ethereum prices exceed certain levels, especially if you've achieved life-changing profits
Earlier, I mentioned combining price and time for better exits. If, for any reason, Bitcoin surpasses $200,000 or Ethereum exceeds $10,000 before October 2024, I would start taking profits earlier. This cycle may move faster than expected!
If so, make sure to recover your principal plus some profit. I plan to liquidate all my altcoins and Ethereum, and possibly sell some Bitcoin holdings—especially those funded by altcoin profits. Now, if I made a 10x gain on an altcoin, I’d shift that profit into Bitcoin or Ethereum. Then, when prices reach my exit range or trigger levels, I’d sell those as well.
I might also decide to keep some Bitcoin. The only reason to speculate at Bitcoin’s top is to buy more later—but that’s risky, and you might end up losing. Never sell all of your Bitcoin.
Applying a similar analysis to Ethereum based on the last cycle suggests our exit window is also fairly accurate. Interestingly, it also indicates Ethereum could far exceed $20,000. That’s an optimistic scenario, but it could become reality if Ethereum ETFs are approved this year.
Create Your Exit Plan Now
If you want to succeed and exit this bull market satisfied, you need an exit plan. If you don’t have one, create it now. Success means sticking to your exit plan—not hitting a specific dollar amount.
Ask yourself: how much do you want to earn in this bull market? Set a goal, but keep it realistic. Check your current crypto portfolio value—what is it today? Then multiply that value by 2x to 10x. If you aim for 10x, you might be unrealistic. If you aim for 2x, you're more likely to succeed. Choose your range and risk tolerance. This becomes your price target.
If your target isn’t reached between October 2024 and March 2025, seriously reconsider whether your price target is realistic. I believe 2025 is very likely to be the year the market turns bearish, so once next year begins, don’t wait too long. Take profits during the rise. Use DCA to exit.
If you meet your goal and stick to your plan, you’ll exit this bull market satisfied. Control your greed, because as prices rise, you’ll be tempted to change your target. That’s exactly when you’ll miss your exit window.
Don’t fall for FOMO and re-enter the market at the end of 2025. If the market tops, forget about it for one to two years. You can re-enter during the next bear market.
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