Sticking to these exit strategies and respecting historical cycles can help investors avoid greed and make timely exits before the next winter
Bitcoin bull markets can turn out to be wonderful opportunities for everyone to rake in huge amounts of profits.
Sometimes even, in the heat of bull markets, a trader's skill wouldn't matter that much, as long as they weren't too greedy and they held their bags for long enough.
Bull markets are mostly all fun and games—right until they turn into bear markets.
In 2011, Bitcoin soared from $0.03 in January, to around $32 in June, to the delight of investors.
Every day was Christmas—until Bitcoin deleted several zeros and crashed from $32 to a mere $0.01 within days (even lower than before).
The same happened in 2018 – 2020 when Bitcoin soared from $1,000 to a peak of $19,666.
In the most recent one from 2022, Bitcoin crashed by around 75% from nearly $70,000 to about $15,000, and we still haven't (fully) recovered.
But what if there was a way to escape all of this?
The crypto market is starting to bounce back, and everyone can tell that the next bull run is either here already, or extremely close.
How can you enter the crypto arena, and escape with (most) of your profits, before the market eats it all up again?
According to a new YouTube insight piece from a crypto analyst named Dennis Liu (Virtual Bacon), here are three of the biggest exit strategies to keep in mind for Bitcoin (and by extension, the rest of the market).
Here are all of the signs that the market has reached its peak and it might be time to sell.
This one is a no-brainer.
The first thing to keep in mind, according to Liu, is to have a set target for Bitcoin in mind.
Once the flagship cryptocurrency hits this level, investors are advised to sell, regardless of how much further up prices go.
For Liu, this price level is the $200,000 zone for Bitcoin and the $15,000 zone for Ethereum.
Liu thinks that these targets are realistic and achievable, considering historical trends and the laws of diminishing returns.
Liu argues that when these cryptocurrencies hit these price levels, the market would have become overheated, and might be due for a correction.
By having a clear price target, investors can avoid the temptation of greed and clouded emotions.
The second tip from Liu to investors is to respect the time factor.
Liu says that he intends to exit the market by the end of 2025, no matter what.
He bases this decision on an analysis of Bitcoin's halving cycles, and how long bull markets last, on average.
Liu believes that by setting a time limit for himself, he can stay disciplined and rational. Moreover, investors can also avoid the pains that follow overconfidence and complacency.
Liu is an avid respecter of historical patterns and cycles, and he believes that every investor should do the same.
This is the third and final one.
Liu says that two moving averages typically indicate when Bitcoin is about to reverse.
These moving averages are the 200-day and 21-week Exponential Moving Averages.
These EMAs according to Liu, are the most important indicators, that show the strength and direction of the market.
He says that if Bitcoin breaks below these EMAs, it could turn out to be the ultimate sell signal.
While there is no completely foolproof way to know how far up the crypto market will go, or when it will reverse and take us straight into the next crypto winter, Liu's strategy seems pretty solid.
Liu says "If any of the three conditions are met, make a full exit, and never look back."
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.