“Should I sell bitcoin (BTC) now or wait for it to rise higher in 2025? And if it doesn’t go up, will I end up losing money?” Those are some of the questions on the minds of several investors who entered the digital currency market to make a tangible profit and are excited about this bullish cycle.
The only certainty is that all price increases have an end and for those who are not willing to endure a “crypto winter”, they must Have a strategy to know when to exit the market and take profits.
The term “crypto winter” is used to refer to a period of prolonged price declines in bitcoin and cryptocurrencies.
For that reason, defining a roadmap can mark the difference to minimize losses and optimize profits.
In addition, having a strategy can be key for those investors who tend to get carried away by emotions when seeing how the candles change from green to red and vice versa. In other terms, It helps avoid hasty or impulsive decisions in the face of a price drop.
Below, NoticiasVE presents 3 strategies for an investor to take into account when taking profits.
1.DCA Inverse
He dollar cost averaging (dollar cost averaging or DCA) It is an investment strategy that consists of making periodic purchases of an assetalways for the same amount, regardless of its price, and for a defined period of time.
In this way, the investor reduces the impact of price fluctuations that the asset, in this case BTC, could experience.
The reverse DCA, as NoticiasVE explained, This method consists of the trader selling their BTC in similar amounts as they make profitsfollowing a specific time schedule.
In this case, one option would be to sell a small percentage of your holdings each time the price rises over a given period. Thus, the investor reduces his exposure, minimizes possible losses and makes profits progressively.
2.On-chain metrics
They are indicators that derive from data in the Bitcoin network, which offer information such as: user behavior, trading volume and market dynamics, etc.
One of these metrics is the relative unrealized profit (RUP)which allows the evaluation of unrealized gains by investors, compared to the total market capitalization.
Before continuing, it is worth clarifying that unrealized gains are defined as the difference between the purchase price and the current price of an asset that did not materialize because the sale was made.
The RUP serves to contextualize these gains in relation to the size of the market. If the indicator is high, it is a sign that a significant proportion of investors have unrealized profits, that is, there is a probability of sales to realize profits.
In contrast, a low RUP means that holders They are less likely to part with their BTC because unrealized gains are low or negative. This could reflect an accumulation phase or they are simply waiting for the price of bitcoin to rise.
The RUP can be observed on various sites such as ChainExposed. In the following graph, which serves as an example, the RUP is represented by a blue line and is slightly above 1.5 (moderate level). On the other hand, when it reaches the red zone, it reflects that there is a high level of unrealized gains.
As can be seen in the chart above, when the indicator reaches the red painted levels, it can be considered a good time to sell BTC (or, at least, that has been the case in previous cycles).
3. Use of technical indicators
Another strategy to take profits is to analyze the information provided by technical indicators. In trading, they are widely used tools because they facilitate the analysis of historical price patterns, volumes and other factors related to BTC.
One of them is the indicator known as Pi Cycle Top. It is available on TradingView and, as explained on the site, it is used to estimate the highest point an asset reaches with a margin of error of three days.
The Pi Cycle Top is based on the 111-day moving average (111DMA) and a multiple of the 350-day moving average (350DMA x 2). When the 111DMA exceeds the 350DMA x 2, it historically coincides with bitcoin price peaks, marking the highest point of the cycle.
This multiple works as a barrier to detect long-term trendsand when the price falls below the 111DMA, it indicates selling pressure in the market.
As can be seen in the chart below, the “Pi Cycle Top” indicates the time when the 111DMA exceeds the 350DMA x 2, which in the past has coincided with key peaks in the price of BTC.
Although it has some advantages, such as having predicted the end of a bullish rally in the past, the indicator is not infallible and can fail due to unforeseen factors.
Finally, it is important to highlight that, before making any decision about your investment portfolio, It is important that the investor carry out an adequate study.