The next crypto bull run is already here. Have you prepared an action plan to make the maximum revenue with your investments? What about planning a crypto exit strategy? We've already witnessed an impressive price rally of many crypto assets recently. However, considering the market volatility and the tendency to drop after a striking rise, it's vital to have a well-thought-out plan, as the best crypto exit strategy is always in handy to capitalise on the potential gains and mitigate risks. Whether you are taking your first steps in the crypto market or you are a seasoned investor, join us as we navigate all the complexities of the next crypto bull run and select the best crypto exit strategy. 

What is a Crypto Exit Strategy?

In the context of crypto trading, a crypto trading strategy is a plan on how and when a trader should sell their holdings for the maximum revenue. The primary purpose of an exit crypto strategy is to ensure that you won't lose money on your investment, meaning you won't sell assets cheaper than the cost you purchased them. To ensure you never lose the best exit moment, it's essential to have a clear and concise strategy within your support and resistance levels. 

An exit crypto strategy should cover the following points: 

• It should specify the process of selling crypto on exchanges;
• It should specify where you will hold your assets while they are not traded;
• How much time do you have until an exchange declares your coins no longer available for immediate sale? 

Crypto Entry and Exit Strategy

Crypto entry and exit strategy refers to when a user enters and exits trades. 

An entry strategy is to identify an advantage and buy crypto at a lower price. It uses technical analysis to determine when a coin trades at a price lower than its historical average and purchases an asset in anticipation of the price increase. 

A crypto exit strategy is a plan to take profits and cut losses when the asset's price moves against the investor's position. A stop-loss order is one of the most famous examples of the best crypto exit strategy. It is set up to sell assets when the price falls below a certain level, thus preventing the potential loss on a trade. 

Crypto entry and exit strategies are indispensable elements of every crypto trading strategy, helping investors maximise profits and minimise the risk of losses. 

Mine Bitcoin for free
 

5 Types of Crypto Exit Strategies

Planning a crypto exit strategy can be difficult in the highly volatile market, especially during the next crypto bull run. However, things become easier when you start controlling the market's timing, ensuring you can decide on the best crypto exit strategy to deliver the highest possible return on investment. 

Although we are not fortune-tellers and cannot confidently say when it is best to maximise your crypto investment, we can help you decide on the best crypto exit strategy to make your exit as valuable as possible. Below are 5 of the most popular crypto exit strategies, each with its own pros, cons, and best use cases. Let's dive in! 

Exit at Price Targets

The crypto exit strategy involves setting a specific price target for each asset in your portfolio. Once the coin starts getting closer to reaching this target, you sell all holdings or parts of them. 

Pros:

• You can realise profits when the asset reaches a specific price. 
• You can manage the risk by selling before the market turns against you. 
• It removes the emotional factor since the assets are sold based on predetermined rules. 

Cons:

• You may miss an opportunity to earn more when the crypto price grows after you sell the asset.

Best Used When:

• You understand the market and can predict price movements.
• You have a specific financial goal, and selling assets at the price target will help you achieve it.

Exit by Portfolio

The crypto exit strategy suggests selling assets based on your crypto portfolio's total value, such as when your portfolio reaches a certain threshold. 

Pros:

• The crypto exit strategy is simple and easy to implement. 
• It helps you protect your portfolio.
• It can match your financial goals. For example, you can exit after earning enough to purchase a house. 

Cons:

• It's difficult to time the market and prevent losses when the prices of assets start rising after you sell them. 
• The crypto selling strategy lacks flexibility and doesn't consider the performance of individual cryptos in your portfolio. 

Best Used When:

• You have a specific financial goal that you want to achieve.
• You want a simple strategy that doesn't require constant monitoring.

Exit by Return 

The crypto exit strategy involves selling your holdings when a specific percentage is achieved. For example, you can adjust exiting a position when your return percentage reaches 100%.

Pros:

• The strategy ensures you don't miss out on potential gains. 
• You can manage the risk of losing profit by exiting the market before it turns against you. 
• It removes the emotional factor from the decision-making process. 

Cons:

• If the crypto price rises after you sell the asset, you will miss out on profits. 

Best Used When:

• You cannot constantly monitor the market, and you want to ensure you don't miss out on making profits.
• You clearly understand the crypto market and can accurately predict price movements.

Start Trading
 

Dollar-Cost Average Out

The crypto exit strategy supposes you sell a specific amount of your crypto holdings regularly, regardless of the asset's price. 

Pros:

• You can mitigate the market volatility by preventing yourself from selling assets in the low market. 
• The crypto exit strategy does not require constant market monitoring. 
• It lets you spread the risk over some time instead of selling all at once. 

Cons:

• You may miss out on profitable opportunities when the market rises sharply. 
• In the continuously growing market, the dollar-cost averaging out could lead to lower returns than selling all at once.

Best Used When:

• The market is highly volatile, and the future price trend is uncertain.
• You want to avoid the emotional stress of trying to time the market.

Exit by Cycle

The crypto market commonly moves in cycles, with periods of rise followed by decline. To maximise profits, you can plan your crypto exit strategy by selling at the cycle's peak. 

Pros:

• The strategy minimises the risk of loss when the asset's price drops. 
• It helps you grow your wealth by investing in better-performing assets. 

Cons: 

• You can miss out on potential gains by setting exit points close to the current market price. 
• You can face substantial losses when exit points are placed too far. 
• The strategy might require more time while managing your portfolio. 

Best Used When:

• The strategy prevents considerable losses when the crypto price starts dropping. 
• It helps maximise profits by ensuring certain assets still have a stake in potential future gains.

Choose your wallet on StormGain
 

Factors to Consider When Choosing a Crypto Exit Strategy

The right choice of the crypto exit strategy can greatly impact your profits and losses. Consider the following factors when choosing the best crypto exit strategy: 

• Ensure the exit strategy aligns with your overall trading goals. Your risk tolerance, whether you aim for short-term or long-term gains, should define how conservative your exit strategy should be.
• Mind the current market conditions while choosing the best crypto exit strategy.
• Unlike bearish markets, bullish markets can warrant different strategies. 
• The choice of crypto assets also plays a big role. The exit strategy that works for one coin may not work for another.
• Mind external factors, like technological advancements, macroeconomic factors, geopolitical events, etc. 
• Do not forget about your financial situation, which should help you define the best time to exit a position. 

Mistakes to Avoid

We all make mistakes, especially when it comes to trading cryptocurrency. However, you can lessen the risk of making mistakes by learning from others' examples. Let's consider the following most common mistakes to avoid when deciding on the best crypto exit strategy. 

• Exciting early due to fear. It's a common mistake caused by the highly volatile nature of the crypto market. Rapid price fluctuations can result in crypto traders panic-selling their assets once noticing the first sign of a downturn. 
• Holding for too long made them overly optimistic about their assets' future.
• You risk developing erratic trading behaviours if you lack a clear strategy and make decisions on the fly. 
• Ignoring fees while selling crypto is another mistake to avoid when determining exit points. 
• Relying solely on technical analysis without considering fundamental factors can be a mistake to avoid when choosing the best crypto exit strategy. 

How to Take Profits from Crypto Without Selling?

Besides selling your holding, you may consider adopting the following strategies to monetise your investments: 

1. Crypto-Backed Loans, which suggests using crypto as collateral to borrow fiat money. It provides immediate liquidity without selling assets and potentially avoids tax events.
2. Staking and Passive Income involve locking up a certain amount of crypto to support blockchain operations and earn a steady income.
3. Yield Farming and Liquidity Mining provide liquidity to DeFi platforms and earn returns through interest and tokens.
4. Lending is part of how investors can lend their cryptocurrency holdings and earn interest on their loans.

Whatever crypto exit strategy or method of profiting from crypto without selling it you choose, always remember that all investment decisions come with risks. It's crucial to weigh all the pros and cons and research before making investment decisions. 

Register Now