Let's admit it: crypto market is volatile! Therefore it would be a wise decision to take profits while the market is on the rise, so that you can use that money for your needs, or even buy back the crypto at a lower price when the market dips. So let us look at some of the Crypto Exit Strategies :
1) Technical Analysis
Most traders and analysts use technical analysis tools to time the market, and hence they exit their positions based on one or more indicators. A few examples include
A) Reversal of MACD
B) Bearish Death Cross (where 50 weekly EMA cross below 200 weekly EMA)
C) Blowing off top in RSI
D) Ichimoku cloud reversal
These are only a few indicators which I wrote as examples.
They are fairly accurate if we use multiple indicators together.
2) Dollar Cost Averaging
Most of us will be familiar with Dollar Cost Averaging (DCA) while buying coins. Similarly, a good exit strategy can be to sell at every tops on the way up.
3) Price targets
Selling at price targets is a very common method of exiting out. It mostly includes targets set from technical analysis, or emotional targets, such a $100k for Bitcoin. But since most people might already be aware of such an issue, they might start selling a fraction of their holdings from prices just below the target, say $90k. And when the prices dips after touching these targets, you can always buy back, in case you are interested. You can check out these targets using the "Depth" feature.
4) Personal Targets
Suppose your aim of getting into crypto is to buy a car worth $50,000. Then the moment your portfolio touches that target, you exit the market. A good aspect about this method is that, you always take your profits from the market. You might miss on some big profits if the market still booms, but hey, at least your target is met.
5) Bitcoin Cycle
Bitcoin is the Alpha Crypto. Most other coins almost always follow Bitcoin and no coins can be the bad boy and do the opposite of Bitcoin in all cycles. So it is always a wise decision to keep an eye on Bitcoin cycles and its movements. Most alt-coins peek just after the Bitcoin peak (not a rule). Also remember that coins without strong fundamentals can go to dust in a bear market, when Bitcoin drops hard. Therefore, inorder to be on the safer side, it's better to exit before the bear market is full fledged!
6) HODL
It is not an exit strategy. Instead it is a Non Exit Strategy. Historically, the people who gained most profits from crypto are the ones who lost their wallet keys and got back later, or people who forgot that they even owned crypto to later realise that they had become millionaires. So not a bad strategy after all! (Just make sure you are HODLing the right coins, and not some shitcoin)
Thanks for reading till the end.
Cheers ??
