Bitcoin Boom And Bust: Getting Ready For The Market Top

Summary Bitcoin has surged 39% in three months, and the market suggests further gains, which prompts investors to plan for profit-taking. Personal wealth management, special life events, and a flight to less volatile assets are all valid reasons to sell. The 500-day Bitcoin halving model, Pi Cycle Top Indicator, Crypto Fear and Greed Index, and RSI all assist in forecasting the market top. Proactively move crypto to exchanges, unstake any assets, understand fees and taxes, set partial profit targets, and monitor for blow-off tops. Introduction If you are a Hodler of Bitcoin ( BTC-USD ), congratulations! It’s been on a great run lately, up 39% over the past 3 months. Bitcoin 3-month chart (Coingecko.com) Most cryptocurrencies have also enjoyed bullish trends recently, and the market appears poised for further gains. So, if the market continues to surge, what’s your plan? Will you hold forever or take profits? When’s the right time to sell? What groundwork should you lay now? This article offers practical insights on spotting a potential market peak and preparing accordingly. Having a plan before the market overheats is critical. To sell or not to sell, that is the question Why would anyone consider selling their Bitcoin? Michael Saylor has famously said , “Never sell your Bitcoin.” To Mr. Saylor, I’d say, “You do you.” For the rest of us, personal circumstances should guide our decisions. Finance is an area of life where we should seek as much guidance as possible but never abdicate our final authority. I’m not here to push anyone to sell, but there are three compelling reasons to consider liquidating Bitcoin or other cryptocurrencies this cycle. The first is wealth management . Five years ago, BTC traded around $10,000 per coin. An investment then is now nearly worth 12X. Those courageous enough to buy during the COVID market dip in March 2020 would now see gains of almost 24X. For some, crypto holdings have grown to dominate their entire portfolio. There is nothing wrong with rebalancing holdings to diversify into metals, quality real estate, and yield-bearing investments. The second reason is various life events, the chief of which is buying a home. Purchasing real estate triggers the immediate need for large amounts of capital, at least for a down payment. Some may prefer to sell enough assets to avoid a mortgage altogether, eliminating the long-term interest costs and providing the wonderful security of outright ownership. Some other important life events could be educational expenses, sudden medical bills, starting a business, or just to cash in your chips for normal or early retirement. The last is what I call crypto fatigue . Some of us have weathered multiple crypto cycles. When I first bought a substantial amount of Bitcoin, the price plummeted 66% in a few months and languished there for two years. Now I’m in my fourth crypto cycle, and I’ve seen it all. Bitcoin crashes of up to 80%, alt coins soaring and then going to zero, the ICO boom, the NFT craze, the Terra Luna crash, the collapse of FTX, Celsius, Voyager, and Three Arrows Capital, and too many scammers to count. Crypto offers high rewards but comes with extreme risk, volatility, and wild events. The emotional pain of drawdowns, scams, and crashes drives many to seek calmer, safer investments. Market top indicators A rookie crypto mistake is relying on gut feelings to take profits. Formulate an exit strategy well in advance and start by identifying when to sell. There are many models useful to forecast the potential price peak of the Bitcoin cycle. Here are summaries of some popular ones. I recommend using several methods in tandem because, as the old saying goes, there is wisdom in a multitude of counselors. The 500-day Bitcoin halving model This ties the price of Bitcoin to its halving events, which occur roughly every four years. The strategy, in a nutshell, is to buy 500 days before the halving and sell 500 days afterwards. Bitcoin prices 500 days before and after halvings Halving Date 500 Days Before Price 500 Days Before 500 Days After Price 500 Days After Approx. Return July 9, 2016 February 25, 2015 ~$238 November 25, 2017 ~$8,200 ~3,345% May 11, 2020 December 28, 2018 ~$3,800 September 26, 2021 ~$43,000 ~1,032% Note: the 500-day post-halving price target is not exact to the day. In 2017, the BTC cycle high was actually in December; in 2021, it was in October. But this model serves as a great “two-minute warning” for the end of the game. The last Bitcoin halving occurred on April 20, 2024, and 500 days after is September 1, 2025. Historical trends would suggest a cycle high slightly after that date, somewhere in September or October 2025. Bonus: Given that the next Bitcoin halving is estimated to occur in March or April 2028, the next cycle low buying opportunity would be October or November 2026. Pi Cycle Top Indicator This technical analysis tool identifies potential market inflection points. It’s based on the relationship between two moving BTC averages, the 111-day (111DMA) and the 350-day multiplied by 2 (350DMA x 2). When the 111MDA crosses above the 350DMA x 2, it indicates the start of a bull run. When the 111DMA crosses below the 350DMA × 2, the charts tell the story of a price peak and subsequent correction. The Pi Cycle Indicator complements the 500-day halving model by providing a more precise signal for when to sell within the 500-day post-halving window. Pi Cycle Top Indicator (Bitbo.io) The Pi Cycle Indicator has predicted Bitcoin market tops in past cycles: 2013: It signaled tops during Bitcoin’s run to $1,000 2017: Flagged the peak near $20,000 in December 2021: Indicated a top around $69,000 in November 2025: As of July 2025, the crossover has not yet been confirmed Crypto Fear and Greed Index Crypto Fear and Greed Index (Coinmarketcap.com) This is an interesting, proprietary tool from the folks at CoinMarketCap. It measures and displays investor sentiment, which is often another clue for buying and selling. From their website : This index ranges from 0 to 100, where a lower value indicates extreme fear, and a higher value indicates extreme greed. It helps investors understand the emotional state of the market, which can influence buying and selling behaviors. The index provides insights into whether the market may be undervalued (extreme fear) or overvalued (extreme greed). By observing the current value of the index, you can gauge the overall mood of the cryptocurrency market. For example, a high value suggests that investors are overly greedy, which may indicate that the market is overheated and due for a correction. Conversely, a low value may suggest that fear is driving prices down, potentially creating buying opportunities. This Fear and Greed Index has only been in existence since mid-2023, so historical data is not available for the previous cycle peaks. However, the all-time high was 92, set in March of 2024, when Bitcoin was at $72,125. The price subsequently slumped for about 6 months and bottomed around $52,000. Despite its limited historical data for past cycles, this tool can still be very valuable. I suggest closely monitoring when it surpasses its all-time high. When used alongside other tools, values above 92 may indicate an approaching market peak. The Fear and Greed Index’s current value of 70 suggests we are still early in the final market cycle. Relative Strength Index, or RSI RSI is one of the most commonly used top and bottom indicators. It’s a momentum oscillator tracking the closing prices over a given time period. Most charting platforms automatically calculate and display it. Traditionally, when the RSI value is over 70, the asset is considered overbought (sell signal), and those under 30 indicate the asset is oversold (buy signal). But these values are not set in stone, and Bitcoin can stay in the overbought territory for a while before the price actually decreases. Bitcoin’s RSI recently surpassed 70, signaling entry into the overbought area and a potential short-term price correction. As an isolated metric, this does not indicate a market top. It highlights the need to combine multiple tools for a comprehensive macro perspective. Final note: These are all tools, not guarantees. Bitcoin’s volatility, market risks, and unpredictable events require extra vigilance during critical periods. Other indicators of market sentiment Watch for signs of retail FOMO (fear of missing out), such as friends and family asking, “What should I buy?” Spikes in downloads of the Coinbase app will signal mass market entry. You’ll have experts on CNBC talking non-stop about their latest picks, and crypto will grace national magazine covers. These are signs the bull market is nearing its end. Preparing to sell As the bull market nears its peak, is your crypto 100% ready to sell? If you’re self-custodying, do you have a plan to transfer to an exchange before the end-stage market frenzy hits? Many platforms still struggle with operational issues during times of peak usage, and delays in transferring assets could mean missing your optimal selling window. Have you completed all unstaking of crypto assets well in advance? Polkadot ( DOT-USD ) offers great yield rates for staking but requires a 28-day unbonding period. Ethereum ( ETH-USD ) may require weeks to free coins for transfer, depending on the platform. Understand the rules for your staking situation and unbond your coins appropriately before the sale. Do you know the commission your exchange will charge for the sale of your coins? These rules can vary greatly and can erode profit if not anticipated ahead of time and managed. Does your exchange offer an OTC desk with advantageous commission rates for larger transactions? Are you prequalified and familiar with the process? Have you linked your bank to your preferred exchange? Have you made successful test transfers of cash out of your trading platform? What are your withdrawal limits? Many exchanges use a tiered verification system that determines user limits for deposits and withdrawals. Imagine a substantial profit stuck on an exchange but limited by low daily or monthly withdrawal thresholds. Have you planned for taxes? Will your sales be classified as short-term or long-term gains? Are the purchase dates accurately recorded, and will that make a difference for short-term (less than 1 year) versus long-term (1 year or longer) gains? Short-term gains are treated as ordinary income. In 2025, they will remain at seven levels: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Long-term gains have tax rates of 0%, 15%, or 20%, depending on taxable income and filing status, excluding the NIIT. See the chart below: Capital gains tax rate 2025 (Nerdwallet.com) The net investment income tax (NIIT) is an additional 2.8% tax that kicks in if your income reaches certain thresholds. Investors taking large profits should plan for this as well. Here’s a calculator from SmartAsset to use as a guide for what could be owed to the IRS. Exit strategies Take partial profits at price milestones Just as DCA (Dollar-Cost Averaging) is often used to build an investment position, setting specific price targets can guide scaling out when selling. What if you wait for Bitcoin to hit $150,000, but it peaks at $149,000 and then rapidly declines? Missing a price target triggers an intense emotional sense of loss, discouraging you from selling during a further decline. Avoid this psychological trap by setting sell orders while the asset value is still increasing. In the example above, targets could be set and triggered for partial lots at $1,000 price increments from $140,000 to $150,000. Trailing stop orders A trailing stop order automatically adjusts the sell price to lock in profits should the asset’s price fall. This also removes the emotion from the sales process by automating the transaction, but requires careful setup to avoid premature triggers. Watch for the blow-off top A blow-off top is a sharp, rapid surge in price driven by intense buying pressure, retail FOMO, and speculative media hype. It often marks the peak of a bull market before a significant correction or an outright crash. Look for parabolic price increases, high trading volume, and extreme greed (> 90) in market sentiment. My price targets and timelines Since Bitcoin is currently at all-time highs, we are entering uncharted territory for the next cycle peak. Arthur Hayes, the co-founder of BitMEX, forecasts that Bitcoin could reach $250,000 by the end of 2025. In my view, that’s possible but not probable. Many analysts favor a $150,000 target, which seems more realistic to me. In my view, timing the selling window is more crucial than predicting an exact price. Historical trends indicate the most significant price action will likely occur after early September, through October, and possibly into November. If we enter September and Bitcoin is already at $150,000, I will begin taking partial profits but allow the bull run to continue. If Bitcoin prints a massive green candle within this predetermined window, I’ll take additional profits, as this may signal the blow-off top. Conclusion Congratulations on riding Bitcoin’s impressive 39% surge over the past three months, but as the market heats up, further preparation is necessary. Now is the time to craft a clear exit strategy, use every tool available to diligently monitor the market, and make sure all the prep work for selling is tested and completed. The process of planning when to take crypto profits not only prepares you for market peaks but also has the additional benefit of clarifying your investment strategies and objectives. Here’s to a successful rest of the year, upcoming profits, and progression towards your overall financial goals.

Source: Seeking Alpha