Your ultimate guide on having an exit strategy out of the market. You might want to save this post for later.

First of all, I will get a lot of hate from angry moon boys for making this post. A lot of people demonize taking profits and will literally gaslight you into being a bad person if you took profit. PS: you're not betraying crypto. Anyways, I would not care less, capital preservation and risk management are paramount. In reality, HODL is a meme, especially with alt coins. And it absolutely does not apply to shitcoins. However, I believe this post will help some people and save them a lot of money that they might actually need later or even not losing amount of money that can improve their lifestyle or their family's financial level. Also, I would not want anyone here to use the suicide hotline when it gets posted. People do not really understand the brutality of bear market unless they live through it. So, no I am not even sorry for taking profits or making this post.

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A lot of us can get overwhelmed in price action over an extended period of time. That you forget what are you in for, and even forget you have sell button. Before you even realize it, you are already -50% from your portfolio all time highs. You need to protect yourself and remain level-headed and execute your exit strategy without hesitation. Because your judgment will be clouded and greed will take over.

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First you should begin with who you're? what is your risk tolerance (that depends on your age, your capital, your level of experience in this market, etc.)

Hodler

He buys at anytime he got money he does not want, he loves bear markets than bull runs because he can acquire more coins at cheaper prices and average down his entry. He does not even care about buying all time highs. He can stomach a 3 year bear market where he's down 90% from his initial capital. Trust me, it is easier said than done, it is easy to say yeah I can stomach a bear market while you are in a bull run. Bear market will humble the shit out of you. He is looking to hodl for at least 10 years. He does not marry an alt-coin because he knows that his favorite alt-coin is probably not gonna be in for the next cycle. Also, your favorite altcoin may not recover its previous ATH, another better project may get developed, etc. I am not addressing these people, you probably got a life outside crypto and you know what you're doing.

These are the cryptocurrencies top coins 8 years ago. Do you recognize a lot of these coin? yeah, me neither.

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September 6th 2013

Investor

He understands the trends of the market cycle. He accumulates in the bear market and take profit in the bull runs. He understands that fair value of an asset does not equal the market value of it. He understands when market is overheated and try to profit out of it to reinvest back when things cool down and market price become less than its fair value (Bitcoin is overvalued in bull-runs and undervalued in bear markets). This post is mostly for you.

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Trader

He follows technical analysis, plan his trades, he trades the plan. Either it's scalping (from minutes to hours) or swing trades (long term trades). This is very risky and takes years to develop this skill to be consistently profitable. However, it is the best strategy for returns. You probably know what you're doin, this post is not for you. PS: 95% of traders lose money.

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So, you decided to invest in crypto, set your goals with realistic expectations. Now what? will I just live in this state of checking my portfolio first thing in the day for the next year? No, you just go have the time of your life until bitcoin and crypto markets reach its maximum danger zone. These zones the price will literally be screaming for you to take profit. However, this is the time where you will hear the most bullish news and everyone is saying we are in a supercycle /s.

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So what are some indicators that signals we're over heated and this bull-run is about to end?

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Bitcoin monthly and weekly RSI is between 90-97

Bitcoin index and RSI on the monthly timeframe

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This usually signals that market is overheated and need to cool off for a bit.

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Pi cycle top indicator on bitcoin chart

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Pi cycle top on the weekly timeframe

For me, the RSI signals we're "around the top". Pi cycle top confirms it. I like to see this indicator on a daily timeframe. For me, when this indicator gives that we're at cycle top, I will DCA out of bitcoin back to fiat. I do not really know how this indicator works but it worked since bitcoin inception. It indicates that the top is in. Note that we can have multiple cycle tops in one market cycle (just like 2013 and 2014). It indicated that the top was at 62k. However I think we still gonna get another top this market cycle. You can find this indicator on TradingView.

Bitcoin near the upper logarithmic regression band

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Bitcoin logarithmic regression band

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This chart is one of my favorite, it basically tells you what to do as the price progress with time. Make sure to check this site.

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Fear and greed index

Fear and greed index is a sentiment metric that helps you understand the overall sentiment of the crypto market. It is usually a good time to sell when we reach high levels of greed.

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So how should I make my exit strategy? First, you got to identify what is your goal this cycle? This goal should be quantifiable (i.e 5x my capital, 10k in profit, etc) and should be achievable with your risk tolerance (i.e don't expect 100x from current prices when you only invest in bitcoin). With taking the above metrics into consideration, you should know when it's around a good time to sell.

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That takes us to the hardest part, actually selling and executing your plan. It is important to DCA your way out of the market, it's as good as DCA your way in to the market. Also, resisting the feeling of fomo to buy back in when you're out because your fav coin can pump 20% the day after that. Once you're out, you're out. Don't comeback for another year.

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Also, these strategies don't account for taxes. Some people prefer to hodl for years to avoid paying taxes and that is a wise strategy.

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I would recommend you follow Benjamin Cowen (one of this sub's fav youtuber) for more long term analysis for bitcoin and crypto. I have learned all this from him, so shout out to him. I hope he would be proud that his info gets known by more people, rather than misleading people and moon boys.

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Probably I will make another post on how to plan your exit strategy out of alt-coins. Generally, it is the same principle, but it takes a slightly different approach. You guys let me know in the comment if you want more of that.