How to avoid the peak during a bull market? What are some practical selling reference indicators?
Source: Talking about Li and the Outside
However, compared to the organization of ideas, some partners seem more willing to ask for a definitive answer. For example, in the past few days, I have received several messages in the public account backend asking when they can escape the top. In response to such questions, I still have to say that we cannot provide a clear answer directly. First, I do not know your specific position situation; second, I do not know your goals and risk preferences; third, I cannot accurately predict market trends.
1. Consider selling (escaping the top) based on your own position and goals
For example, when we started a new round of dollar-cost averaging into Bitcoin in 2022, we set a target return of 3-5 times for this cycle, considering the average holding cost and personal expectations. The selling plan started when Bitcoin broke through $100,000, and I began to reduce my position strictly according to trading discipline in December last year (2024). This has been shared several times in previous articles. If you often read the articles from Talking about Li and the Outside, you should be able to clearly understand my personal holdings and operations.](https://mp.weixin.qq.com/s?_biz=MjM5MjMxNDg4MA%3D%3D&mid=2257492058&idx=1&sn=42d9aa74a120cdd1af7321697768c9dc&scene=21#wechatredirect)
Of course, the above is just my personal example. In other words, when to sell and whether to escape the top now… such questions should not be answered by others, but should be considered based on your own goals and plans. Everyone's risk preferences, goal settings, and the cryptocurrencies they hold are different. No one can always buy at the lowest point and sell at the highest point. Just because you directly ask when to escape the top does not mean I can give you a clear answer. Moreover, my own answer (personal trading style) may not suit everyone.
In short, what we can provide is mainly some ideas or methodological aspects, and these require you to draw inferences from one instance and further form a set of methodologies or strategies that suit yourself.
2. The market cannot be accurately predicted; any prediction is a probabilistic behavior
Trading is not about pursuing 100% certainty; such things cannot be achieved. It's like a poor person trying to pursue Fan Bingbing; there will be no result. What we should pursue are those high-probability events. For example, I believe that hoarding Bitcoin has a 99% probability of making money, which is why I decided to invest at least 80% of my position in this endeavor.
No matter how well a person understands the market, determining the bottom and top of a cycle is almost impossible. The only thing that can be determined is a reasonable range that one believes in. In last year's e-book "Blockchain Methodology" from Talking about Li and the Outside, we also made several price predictions for Bitcoin. For example, in an article from February 2024, I mentioned that I personally lean towards $100,000-$120,000, and this range would be where I start considering selling in batches. As shown in the figure below.
However, this so-called price prediction is merely a speculative conclusion based on some data indicators. In other words, we believe that this result is likely to be achieved (if the opposite result occurs, we will also have a corresponding Plan B), and we will optimize our goals and operational strategies based on this, and that’s all.
Of course, Bitcoin has now broken through $100,000 and is adjusting at a high level. As for whether Bitcoin will continue to $150,000, $170,000, or drop back to $50,000, these outcomes are not that important to us. For us, as long as we strictly execute the planned batch selling, that is sufficient. Regarding the new round of dollar-cost averaging plans, we tentatively plan to consider formulating them in 2026.
3. Instead of seeking a definitive answer from others, it’s better to research indicators yourself
In past articles from Talking about Li and the Outside, we have indeed shared and organized many tools and indicators. If you can persist in recording and select some data dimensions to design your own escape top indicators, this will definitely be more reliable than asking others "when should I sell" everywhere.
Next, let’s briefly summarize a few indicators for your reference. I will also directly list a summary table as an attachment, which serves as a supplement to last week's article (How to Design Your Own Escape Top Indicators):
- RSI
Historically, when the RSI value breaks above 90, it indicates that the market is entering the final stage, usually reaching a temporary peak within the next 4-7 weeks, and this process is often accompanied by divergence (i.e., the RSI value decreases while asset prices continue to rise). As shown in the figure below.
- NUPL
When this indicator enters the Euphoria/Greed zone, i.e., when the NUPL value >75%, it usually means that the market may be approaching a temporary peak. As shown in the figure below.
- Pi Cycle Top
This indicator uses two moving averages to predict the top of Bitcoin. When the two lines approach or directly cross each other, it indicates that the market may be nearing a temporary peak. As shown in the figure below.
- Mayer Multiple
This indicator compares the current Bitcoin price with the 200-day moving average. Historically, when this indicator reaches a value of 2.4, it indicates that the market may be approaching a temporary peak. As shown in the figure below.
- MVRV Z-Score
This indicator uses historical trends to identify whether the current price is overvalued or undervalued. Historically, when the MVRV Z-Score breaks above 6, it indicates that the market may be approaching a temporary peak. As shown in the figure below.
As an example, we have simply listed these 5 indicators. If we further compile all the necessary indicators into a table, it can provide a good reference for your operations, as shown in the figure below.
Additionally, the reference selling ranges in the template table above need to be modified based on your own goals and risk preferences. If your risk preference is relatively low, then do not set such a high reference range. For everyone's convenience, I have directly placed the corresponding table attachment in Tencent Cloud, and I have also added some commonly used indicator tool websites. Those who are too lazy to create their own tables can download and use it directly (you can further optimize and expand based on the existing table as needed).
Of course, since most indicators are based on historical data results or conclusions, and some indicators also have a certain lag, indicators can only serve as a supplementary role. In addition to indicators, we can also consider some macro factors, policy trends, liquidity changes (market behavior and supply-demand relationships), etc.
However, it must be said that no matter how many indicators there are, they are not as important as managing your position well (including management plans for potential crises). The market's top is always full of lies (such as news or rumor lies). Everything we do is not to conquer the market, but to think about the intentions of the main players (follow the main players) or to outperform the vast majority of ordinary retail investors in the market.
At the end of the article, let’s briefly review what noteworthy events occurred this week:
1/ Jupiter announced via the X platform that they have acquired Moonshot. As shown in the figure below.
Moonshot, launched in July 2024, is an application that allows users to buy and sell Memecoins directly using fiat currency. It initially gained attention due to the popularity of tokens like MOODENG and SPX6900 issued on the platform. Last week, it exploded in popularity due to the issuance of the TRUMP token, even briefly topping the App Store (US) finance category download rankings. The Moonshot mentioned here is a project incubated by the Pump fun team, Alliance DAO, not the Moonshot product under DexScreener that we introduced in a previous article.
2/ Grayscale applied for a SOL ETF, and CoinShares applied for XRP and LTC ETFs. As shown in the figure below.
In last week's article (January 15), we actually organized some related content. Currently, apart from the ETH ETF, we are likely to see a second altcoin ETF approved this year, which is a good thing for market liquidity. As shown in the figure below. Analysts at JPMorgan recently stated in a report that potential altcoin ETFs could bring in $14 billion in capital inflows within 6 to 12 months.
3/ Ledger co-founder David Balland and his wife were kidnapped in Vierzon, France. The kidnappers demanded a ransom of 10 million euros and cut off Balland's finger as leverage. However, the French National Gendarmerie Intervention Group (GIGN) has rescued Balland and his wife in Châteauroux, and 10 suspects aged between 20 and 40 have been arrested.
4/ Circle (the issuer of USDC) announced the launch of Circle Paymaster, a feature that allows users to pay Gas fees directly using USDC on the Arbitrum and Base chains without needing to hold and use ETH. As shown in the figure below. Of course, Paymaster will charge a 10% Gas fee for each transaction, and it is said that this product plans to expand to Ethereum, Polygon, and Solana chains in the future.
5/ Ads Power was hacked, reportedly with over 20,000 wallet addresses compromised. The funds that users painstakingly earned were wiped out by hackers in one go.
Bloggers who recently promoted Ads Power are probably at a loss. In fact, I also received a collaboration invitation email from this project two weeks ago, but because Talking about Li and the Outside has never accepted any project advertisements, I avoided it. Otherwise, I would probably be criticized now.
6/ Trump signed the first cryptocurrency executive order, "Strengthening America's Leadership in Digital Financial Technology," which mainly involves: clarifying the regulatory framework for the cryptocurrency industry, exploring the establishment of a national digital asset reserve, and repealing SAB 121, which prevents institutions from holding cryptocurrencies.
In addition, Trump also granted clemency to Ross William Ulbricht (the founder of Silk Road, whom we mentioned in our January 3 article regarding his story with Bitcoin), and domestic cryptocurrency projects (Made in USA) will enjoy zero capital gains tax… There have been quite a few news this week, but the market is relatively dull, with BTC consolidating around $100,000, and ETH still striving to defend the $3200 mark.
Note: The above content is just personal opinions and analyses, intended for learning records and communication purposes only, and does not constitute any investment advice.
