Bitcoin has surpassed $90,000 and Donald Trump is driving the crypto bull run. But when should you sell cryptocurrencies, altcoins and Bitcoin? This is not a popular topic, but it is time to discuss it. After all, everyone needs an exit strategy.
Before considering selling altcoins, it is important to be familiar with the characteristics of the altcoin cycle, which will help you understand when to sell Bitcoin and altcoins.
When to sell? Altcoins follow Bitcoin's four-year cycle
After the Bitcoin halving, altcoins usually have a four-year uptrend. Bitcoin has a fixed supply of 21 million, and after the halving event (one happened in April this year), fewer new Bitcoins are added to the market until they are all sold out in 2140. After the halving, the price of Bitcoin will rise for about 16-18 months, and altcoins will follow. However, it should be noted that altcoins perform best when Bitcoin's growth rate slows slightly, which is called "altcoin season". So when selling altcoins, wait for the Bitcoin price trend to slow down slightly.
Bitcoin's dominance is also critical. It is the percentage of Bitcoin in the total market value of cryptocurrencies. The Bitcoin dominance chart shows the changes in its market value share. When Bitcoin's dominance decreases, more funds flow into altcoins, which can be used to judge the direction of altcoins.
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How to exit altcoin trading
1. Profit target: This is a common exit method. For example, if you buy Sui at $3, you can set a profit target price of $10 and place a sell order to wait for the price to reach the target.
2. Sell Signals: There are many websites that provide buy and sell signals for various assets, including altcoins.
3. Technical indicators: such as the 200-day moving average. If altcoins fall below the 200-day moving average of cryptocurrency market leaders such as Bitcoin and Ethereum, it is especially important to consider selling during a bear market.
4. Rebalancing the portfolio: For example, if you buy 5 altcoins at $5,000 each, and some of them rise and some fall after a month, you can sell part of the rising altcoin position and increase the falling altcoin position (buy at a low point) until all altcoins have the same value, lock in profits and buy at a low price.
5. Consider the tax impact: altcoins held for less than 12 months are taxed at the normal rate, and those held for more than 12 months are taxed at 0%, 15% or 20% depending on the filing status and income.
6. Use dollar cost averaging to exit: This is a good way to avoid panic selling. Just like you regularly put money into the trade, you can also slowly withdraw money when the price target is reached.
Finally, remember not to get caught up in the cryptocurrency craze and to have an exit strategy and lock in your gains in order to profit from altcoin trading.
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