As has been mentioned several times, we are currently approaching the end of the cycle of the crypto market. Every increase is always followed by a decrease. Nevertheless, many do not realize the importance of taking profits. Many people actually prefer to take pictures of their portfolios rather than taking actual profits. So, why is taking profits mandatory in crypto?
1 There is a Bull Market, There is Also a Bear Market.
Crypto is a market that moves according to cycles. There is a bull market where crypto prices rise non-stop for 3 consecutive years. Meanwhile, there is also a bear market where the price of crypto may fall for a year. Therefore, when we have experienced high profits in crypto for 3 years, managing the potential of a bear market is not wrong to reduce exposure before the potential bear market.
2 Take Profits Help Compounding.
Although it is difficult to time the market perfectly, when we succeed in taking profits and wait for the down cycle to finish, we can compound more effectively by buying at a lower price (if given) with the hope of acquiring more coins.
3 If 'Stuck', It Takes 3 Years to Return to Entry.
The fact for those who are 'stuck' at the all-time high price and make purchases using the lump sum method is: it takes almost 3 years for the price to return to the entry point. For example, if we bought Bitcoin at its peak (price $60K) in April 2021, it took 1000 days for the price to return to $60K because it was only in February 2024 that the price managed to return to that point. We could utilize our money better than being 'stuck' for 3 years and experiencing a decline. Although ultimately the price of crypto tends to rise, no one is patient enough to wait for 3 years.
4 DCA Method and Saving is Not Suitable for Everyone.
Indeed, we can choose not to time the market and as taught: we can do DCA and make periodic purchases every month by looking at past price performance where there tends to be high performance when using this method. However, many of them are 'impatient' with this method and hope it can be applied and see results immediately, even though like 'saving', it takes time to achieve results.#crypto $BTC