What Is A Bull Run Exit Strategy? How To Take Profits In Crypto Markets
A bull run exit strategy is a predetermined, even methodical plan for when and where to take profits in a bull market, which is when prices are exploding higher. This is usually executed at staggered intervals, rather than all at once. For example, the 2021 bull market peaked at $69K for BTC. I exited the market at staggered levels between the $50K and $65K mark.
A typical Bitcoin cycle lasts approximately 4 years and is largely driven by the halving event, which triggers FOMO and subsequently acts as a self-fulfilling prophecy for the subsequent appreciation. Failure to have an effective exit strategy can lead to significant losses, and even to the loss of all gains from a typical 4-year cycle.
Most Investors Fail Because They Refuse To Adapt
The market will often force your hand. Whether you like it or not, sometimes things change beyond your control, and you have no choice but to adapt. This is another trait of a successful investor: the ability to adapt. Survival and success are often the result of change and the willingness to adapt. Sometimes the window period can be extended, and other times it can be unkind to those who drag their feet.
Something that I have mentioned before in my writings is that revolutions not only create wealth but also destroy it. In actual fact, perhaps it is merely transferred from one group to another, rather than destroyed. The group that positions itself for revolutionary change sees significant wealth, while the obstinate group will ultimately lose its wealth.
Essentially, their wealth will be transferred to the group that is positioned appropriately. This is exactly why I try not to be stubborn when it comes to investment strategies and constructs. Due to certain regulatory changes, I am literally forced to adjust how I respond to the close of this bull run, or as near to the close as I can discern. Watching for key signs through technical analysis and sentiment is key to identifying this chapter.
My Original Crypto Strategy And Why I Had To Rethink It
I had originally proposed not selling my long-term holdings at the peak and maintaining a position in DeFi to generate ongoing income throughout the bear market. Yes, I have long-term trades that I intend to close at the peak. However, I have mentioned before that I value continuous, predictable, and consistent income over massive gains. This enables me to have a great quality of life.
After my past experiences in the professional world, this has become paramount to me. I would rather enjoy modest gains and have freedom than show up for a 9-to-5 each day. I am willing to compromise in order to create consistency. I prefer to devote my time to endeavors that continue working for me in one way or another.
I set out to create income, not gains, and though sometimes the lines can become a bit blurred, it is at the heart of my strategies. So now, instead of generating ongoing monthly income, I am looking towards another idea, while still remaining true to my objective. Just to mention again, regulatory issues have forced my hand in this regard, but may actually prove better in the long term.
How To Maximize Crypto Gains In Months Instead Of Years
What I am about to disclose will not come to fruition unless BTC exceeds $100K. I guess it could, but then I would have to sell a percentage of my portfolio that I really do not want to sell. I am looking to sell the long-term altcoin trades that I have been holding for some time, as well as a portion of my Ethereum holdings. I do not intend to sell any of my BTC holdings, but we will see.
What I am aiming at now is to cash out enough profit to secure 2 years of living expenses. This will put me in a position where I don’t have to worry about income during a traditional bear market. This will hopefully be a minimal percentage of my portfolio, but time will tell.
Why This Simple Investing Shift Has Huge Upside
What this also enables now is stacking all my other passive, trading, and content-related earnings over the next two years. This will be great in that I will be earning coins at the bottom of the bear market, which I will be able to hold in anticipation of 2025, that’s if this world is still standing. Even though I will use these profits as spendable income, I will maximize their use as follows.
You Could Be Earning More Income Without Realizing It
Instead of holding this amount in fiat in a bank account, I will keep it in stablecoins. I will earn interest on this holding, and while I will be taking from it each month, the principal will earn more interest. This will ultimately increase my capital and extend its useful life. In essence, it is approximately a 20% additional return on a lump sum that is decreasing by 5% per month.
Some might read that and not quite get it, but go and work it out, and you may actually be surprised. However, as earlier mentioned, this strategy really requires BTC to break $100K by a substantial margin. I do consider this to be very attainable, all things considered, so we will have to wait and see.
Why Successful Investors Always Adapt Their Strategies
That being said, anything can happen in the market, which always helps to keep one open to adjustments. Always try to maintain the original outcome of your investment strategy. Sometimes you will have to quite simply make changes, but if the end result is still preserved, then it is not that bad.
Final Thoughts
I will have to remain quite focused and attentive to the market in the coming months. I do believe we will see significant price action within the next two to three weeks. Wishing all my readers and subscribers an absolutely amazing final stage of this bull run! Keep a lookout for topping out signals. A double top formation is usually a fairly good signal, especially on higher timeframes. See you next time!