Profit Taking Strategy and How to Maximize Profits from Crypto from Crypto Academy

Bittime - Profit taking strategies and how to maximize profits from crypto from crypto academy. Sstrategy of taking advantage or taking profit is an important aspect that investors need to understand. 

Crypto Academy's Kalimasada shares insights on how to maximize profits in the cryptocurrency market, especially in euphoric times like today, where Bitcoin is currently rallying towards $100,000.

The Importance of Profit Taking Strategy

Currently, many altcoin projects are also experiencing significant increases. 

However, it is important to remember that just knowing what asset is being purchased is not enough. 

Without a clear understanding of when and where to sell, as well as how much to sell, investors risk not realizing the profits they have earned.

Read too What is Market Cap in Crypto?

This Taking Profit education is not an invitation to buy or sell crypto assets

Kalimasada emphasizes that the information presented is not an invitation to buy or sell, but rather as a guide for conducting independent research. 

In euphoric market conditions, experienced market players often feel anxious, because there is the potential for a correction that could occur. If profits are not taken, there is a high possibility that everything gained during a bull market could be lost.

Avoiding Late Taking Profit Mistakes in the Past 2018 Cycle

Kalimasada also reminds of the bitter experiences of many investors who were trapped in previous market cycles, such as in 2018. 

Many buy assets at low prices, but do not take advantage when prices soar. 

As a result, when the market declines, they lose all their investments. 

Therefore, it is important to have a clear strategy for taking profits.

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Late Taking Profit Experience in the 2018 Cycle

In 2018, many investors were caught up in the market euphoria. They buy various altcoins in the hope that the price will continue to rise. 

However, when the market starts to decline, many of them are unprepared and end up losing all the profits they have made. 

For example, many altcoins experience significant price spikes, but then crash drastically. 

Coins like Feathercoin and Namecoin, which were once very popular, are no longer on the market. 

This shows that altcoins cannot always survive in the long term.

What Happened to Feathercoin?

Feathercoin (FTC) is an altcoin that was launched in 2013 as a fork of Bitcoin. 

In the beginning, Feathercoin gained attention because of some of the innovative features it offered, such as a more efficient proof-of-work system and the use of a different hashing algorithm. 

However, as time went by, Feathercoin experienced several challenges that led to a decline in popularity and value.

1. Loss of Community Interest and Support

After the initial surge, Feathercoin started to lose support from the community and developers. 

Many investors are turning to other, more promising altcoins, such as Litecoin and Dogecoin, which have more active communities and more sustainable development.

2. Technological Limitations

Feathercoin was unable to compete with the innovation offered by other projects. 

Despite having several unique features, Feathercoin was unable to attract enough attention to maintain its position in the market.

3. Market Volatility

Like many altcoins, Feathercoin experiences extreme price volatility. After peaking in price in 2013, the value of the FTC continued to decline, and many investors lost their money.

Currently, Feathercoin is no longer one of the altcoins to pay attention to in the cryptocurrency market.

While there are still some transactions taking place, Feathercoin's market capitalization and trading volume are very low, and the project does not have significant active development.

What Is a Blow-Off Top?

One phenomenon that needs to be considered is blow-off top, which is a moment where the price of cryptocurrency, especially Bitcoin, rises significantly in a short period of time, followed by a sharp decline. 

In one month, the price of Bitcoin can rise hundreds of percent, then suddenly fall tens of percent. 

This often causes panic among investors, who are unprepared for rapid price changes.

Examples of Top Blow-Offs in 2013 and 2018

In 2013, Bitcoin experienced a tremendous price spike, reaching almost $1,200. 

However, after peaking, Bitcoin's price fell back to around $200 in a relatively short period of time. 

Many investors do not take profits when prices are high, and they suffer large losses when prices fall.

Similarly, in 2018, Bitcoin reached a high of nearly $20,000 before experiencing a drastic decline to around $3,000. 

Many altcoins followed in Bitcoin's footsteps, experiencing similar price spikes, but then falling deeper. 

This is a clear example of a blow-off top that caused many investors to lose money.

Read too Bitcoin Price (BTC)

Profit Taking Strategy to Maximize Profits in Crypto Academy Style

Kalimasada shared several strategies that can be implemented to take advantage:

1. Moonbags Strategy

This strategy is one of the most effective and easy to implement. When the asset price rises 100%, investors are advised to sell 50% of their position. 

In this way, initial capital can be secured, while remaining assets can be allowed to continue to grow. 

For example, if an investor buys Bitcoin for IDR 100 million and the price rises to IDR 200 million, they can sell IDR 100 million and keep the remaining Bitcoin as profit.

2. Exit Grid Strategy

This strategy involves selling assets in a specific area of ​​value, such as a predetermined resistance level. 

Investors can sell some of their assets when prices approach certain psychological levels, such as a round number or a previous high. 

This way, investors can capitalize on market momentum and secure profits.

3. Using the Fear and Greed Index

The fear and greed index is a useful tool for measuring market sentiment. 

When the market is in condition extreme greed, this could be a signal to take profits. Conversely, when the market is in condition extreme fear, this could be an opportunity to buy. 

Understanding market sentiment can help investors make better decisions.

4. Using Fibonacci for Exit during Price Discovery

Kalimasada also emphasizes the importance of using technical analysis tools such as Fibonacci to determine exit points when price enters a phase price discovery. 

In this phase, asset prices can rise higher than before, and Fibonacci extensions can be used to identify important levels where investors can take profits. 

For example, by drawing a line from high to low, investors can find extension levels such as 161.8%, 261.8%, and 361.8%. 

When prices reach these levels, investors may consider selling some of their assets to secure profits.

Read too What Is Discovery Price?

5. Take Profit at the End of the Cycle

Investors may also choose to hold their assets until the end of the bull market cycle. 

Although this is risky, this strategy can be profitable for those who believe in the long-term potential of the assets they own. 

However, it is important to remain alert to market changes and be ready to take action if necessary.

Read too How to Buy Bitcoin (BTC)

Conclusion

Profit-taking strategies in the cryptocurrency market are essential to maximize profit potential. 

By understanding various strategies such as moonbags, exit grids, and using fear and greed indices, as well as technical analysis tools such as Fibonacci.

Investors can make better decisions and avoid the same mistakes that occurred in previous market cycles.

FAQ about Profit Taking Strategies and Maximizing Profits from Crypto

1. What is the moonbags strategy in cryptocurrency investment?

The moonbags strategy is a method in which investors sell 50% of their position when the asset price rises 100%. 

In this way, initial capital can be secured, while remaining assets are allowed to continue to grow. 

For example, if an investor buys Bitcoin for IDR 100 million and the price rises to IDR 200 million, they can sell IDR 100 million and keep the remaining Bitcoin as profit.

2. How do you use Fibonacci to determine the exit point during price discovery?

Fibonacci can be used to identify important levels where investors can take profits when prices enter the price discovery phase. 

By drawing a line from the high point to the low point, investors can find extension levels such as 161.8%, 261.8%, and 361.8%. 

When prices reach these levels, investors may consider selling some of their assets to secure profits.

3. Why is it important to take profits in the cryptocurrency market?

Taking advantage in the cryptocurrency market is essential to maximize potential profits and avoid major losses. 

In euphoric market conditions, such as today, there is a risk of correction which could cause prices to fall drastically. 

By having a clear strategy for taking profits, investors can realize the profits they have earned and protect their investments from market volatility.

How to Buy Crypto on Bittime

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Also, visit the Bittime Blog for interesting updates and educational information about the crypto world. Find reliable articles about Web3, blockchain technology, and digital asset investment tips designed to enrich your crypto knowledge.

Reference:

• How to Maximize Profits From Crypto, https://www.youtube.com/watch?v=GaCnPJNBj-c, Accessed November 23, 2024

Author: IN