Don’t know when to sell bitcoin? Try reverse DCA

It is surely obvious to say that the popular phrase “everything has a beginning and an end” can be applied to any context, such as books, a movie, or even the bullish cycle of bitcoin (BTC).

Just as a period of price increases began, In the coming months a “crypto winter” could begin. In trading, this term is used to describe a prolonged period of falling prices (which can span months or a couple of years) for bitcoin and cryptocurrencies.

So for those who want to avoid exposure to downside during crypto winter, it helps to have a profit-taking strategy.

An effective option that has given good results in previous cycles is the Dollar Cost Averaging (DCA) inverse.

When a trader mentions DCA, it means that he plans to implement a recurring BTC purchase plan for the same amount and for a set period, regardless of how much the quote is.

Through this strategy, The investor can lessen the impact of a price correction that bitcoin could suffer.

However, we are talking about profit taking and not buying, and that is why we refer to reverse DCA.

In this case, it is about establishing a roadmap to sell BTC, in similar quantities over a certain period of time. As he gets rid of his holdings, the investor accumulates fiat money and minimizes possible losses.

As NoticiasVE explained, an example of reverse DCA is when the investor sells a small percentage of BTC every time the price rises, for a defined time. In this way, you reduce your exposure to possible fluctuations in the price of the digital asset or anticipate the arrival of a “crypto winter”.

To complement your reverse DCA strategy, you can use the Bitcoin Halving Cycle Profit of the TradingView platform. “This indicator streamlines the analysis of halving events, providing explicit signals for both profit-taking and dollar-cost averaging strategies,” the website explains.

On all past occasions, the bullish cycle of the digital asset market was related to the halving. After each halving, the emission and, therefore, the selling pressure on the part of the miners is reduced. This reduces supply and the price tends to rise.

In this framework, any news can act as a catalyst for the price of bitcoin, such as, for example, Trump’s victory in the United States elections.

The following graph shows how the price of bitcoin behaved after each halving. However, for reverse DCA what matters It is the area colored green, which represents the optimal period for taking profitscontinuing with historical patterns.

The end of that period to sell your holdings is represented by a square painted red. If history repeats itself, it would end within 80 weeks after the halving.

Although this is a method that has given successful results in previous cycles, it is important that Investors do their own research to draw conclusions and identify the time to exit in time and sell BTC holdings.