Having a diverse and high-value crypto portfolio will not mean much if you're not very good at selling crypto at the right time. Considering how volatile the crypto market can be in many cases, it is important to understand that you can't just treat it like the stock market: cryptocurrency is a whole other beast.

So, how are you supposed to know when to sell crypto, and what can you do to turn a larger profit on average? The more you know about selling at the right time, the easier it becomes to avoid unexpected losses or sub-par profits that might kill your crypto-trading momentum.

Crypto and Stock Market Cycles

Market cycles are the heart of all cryptocurrency markets. These are cycles of upwards trends followed by large dips in value, often taking several years to fully complete and "reset". Exchange platforms like coinpass offer a lot of statistics detailing how these cycles work, as well as ways to see where each cryptocurrency currently is within its own cycle.

A market cycle is basically the space between the highest and lowest market cap of a cryptocurrency and usually occurs due to the actions of the people buying and selling it. The crypto value will rise and fall based on overall interest in the currency, as well as the amount people are actually selling it for.

These cycles are not an exclusive mechanic to just crypto, but they are most noticeable through crypto trading. Since crypto is usually decentralized and has no main authority or management team, there is no course-correcting.

The Upwards Trend

For example, most currencies see an upwards trend as people begin to initially invest, going from skeptical optimism to a more defined kind of belief in the coin. This draws more buyers, increasing the value and pushing the opinion of the currency even higher as a result.

Less experienced traders often assume that this spike in value will continue forever, but it actually gets riskier and riskier as it approaches a higher peak. This usually leads to a massive amount of interest as the currency becomes the "next big thing" eventually reaching a kind of critical mass.

The Drop

Eventually, the bubble bursts, and the value dips. This is usually a smaller dip that still has people buying since the currency has dropped from its usual high, but this will not last long before a second dip eventually rockets the currency back down to its initial value.

This is often accompanied by panic-selling and denial as traders sell off as much as they can before the value drops too far. Inexperienced traders hold on until the very end, assuming that the value will rocket up again quickly.

The Reset

After that, everything resets. The currency drops back down, and there is an initial spell of annoyance as buyers get frustrated with losing their investment. However, now that the currency is low again, it usually becomes another target for more buyers to try out.

This starts the cycle again, pushing the currency value higher and making more buyers attach themselves to it. If nothing else interferes, then the crypto is likely to go through the same cycle again, this time with more people getting involved in capitalizing on the expected peak of the currency based on its performance during the last cycle.

Selling vs Holding

It is important to understand that most people will fall into two entirely different trading strategies. In the broader scheme of things, selling coins can be done in one of two ways, both of which are valid parts of the crypto world.

The first is buying to sell - this means making an initial investment and using the market volatility to sell crypto for profit as early as you can. Both new and experienced traders tend to do this, and it can be great money if you pace it outright. Short-term gains are the focus here.

The other is buying to hold. This means holding on to volatile crypto in the long-term and waiting for it to gather up more value, often over the course of months or even years. This makes it more of a financial asset rather than a one-and-done trade and puts long-term gains in the spotlight.

Both of these options are valid, but neither is necessarily correct in every situation. Casual traders will often stick to one or the other, but experienced crypto investors know to be flexible and adapt based on the current price bubble or price drop their coins are experiencing.

Why is this important? Well, it helps to understand that you never have to start selling stuff. The stock market never forces you to sell stocks, and crypto is the same - you can always risk holding on to a crypto investment and wait for it to develop long-term value.

When to Sell Cryptocurrency?

There are some cases where you should ideally sell at least a portion of your crypto - some for positive reasons like higher sale value, and others for negative reasons like incoming price crashes. Looking at all the stats and deeper details can help, but some of this relies on expertise and instinct.

You Regret Your Initial Investment

A lot of people get into crypto using some of the more well-known and popular coins, but those might not be the coins you actually want to use in the long term. Exchange platforms can have countless crypto options, and the only reason you might have chosen something like Bitcoin is because of name recognition.

If you did not do your own research ahead of time, it is understandable that you would want to pull out and do more extensive research before diving into a better coin. It helps to start slow and figure out how you want to proceed into the crypto space rather than diving into the first currency that catches your eye.

Whatever the reason, it is always a good idea to sell your crypto if you are not happy with the currency you have chosen. Just be sure to not panic-sell: if you are going to sell cryptocurrency anyway, you might as well wait until you could turn a profit with it.

Massive Value Increases

With how volatile crypto profits can be, you might wake up one day to find that about thirty dollars of crypto have increased in value to over a thousand dollars. In situations like this, you should definitely sell some of your current crypto holdings.

For many people, selling before the value dips is of the utmost importance. This can be even more important if you are on the lower end of the finance and budget spectrum, where an incredible average return of more than 1000% could literally become life-changing.

Even if market trends mean that the value keeps increasing, the last thing you want is to miss out on the value swinging in your favor. A volatile market is hard to predict, and profits can disappear quickly if you do not do anything to secure them.

A Lack of Long-Term Success

People who trade crypto often eventually develop a general sense of when their digital currency is performing well. This can sometimes create cases where you feel like you need to sell your crypto for some outside reason, such as a lack of interest or disinterest in turning a higher profit.

If you have doubts about the currency or have been seeing a lot of other people turn away from it, then it might be a good idea to sell your crypto as well. Getting overly attached to one particular cryptocurrency is never a good idea, especially if you have been ignoring others.

Better Options

Cryptocurrency reading is all about seizing cryptocurrency investment opportunities whenever they arise, and sometimes that means switching to a brand new cryptocurrency. Whether it is a better investment opportunity or just something that you are more comfortable trading, switching over is always an option.

It does not have to be a total switch, either. You can sell a portion of your crypto and use that money to enter more cryptocurrency markets, making sizable gains through multiple currencies at once. Veteran traders have huge, diverse crypto portfolios for a reason: getting a firm grasp on more than one currency can open up a lot of new opportunities for profit.

Cleaning Up

Many people eventually do the crypto equivalent of a garage sale. Maybe you have old currencies that could be turned into useful house money, or perhaps you simply have a lot of old cryptos that you do not ever plan on using again. Cleaning up your digital wallets is not a bad idea.

This is especially true for people who were involved in crypto a long time ago but dropped off or who were given crypto by a family member. Even if you got into cryptocurrency trading, that particular currency might not be one that you are interested in, and selling it off is a nice way to clean up the loose ends while earning a little extra money.

Remember that you should wait until you can turn a decent profit to sell it. This might not always be possible with older or more obscure coins, but it is still a good idea to wait until the value sees a small upwards trend to maximize how much you can sell them for.

You Want To

Sometimes you simply just want to sell your crypto. Maybe you do not like how much profit it will create, or you want to take a step back from being an active crypto and stock trader. While keeping your crypto is always a good idea, there is nothing wrong with cutting yourself out of the crypto space for a while.

This might also be a good idea if you do not like how you originally invested. If you want to do some deep research and start your cryptocurrency trading experience completely fresh, then you can always pull back from cryptocurrency investing and take a small break before returning.

It Is In Free-Fall

Sometimes you can just tell that a currency is starting to fall apart, and in those cases, it is often best to just sell unless you are sure that it will level out again soon. Whether you are in for the long haul or just investing in that currency as a little experiment, major drops in value should be a big deal.

Keep an eye out for a few signs that a currency might be about to plummet in value. This can happen for a range of reasons - from celebrities mocking the currency to sudden spikes in the amount of interest it keeps garnering - and it helps to keep yourself informed when dealing with crypto.

A rising "bull" market can slip into a falling "bear" market at a moment's notice, but the difference is in how far the values drop. Sometimes a currency drops so slightly that your initial investment is basically all still there, whereas others may crash so badly that they take months to recover.

When Not to Sell Crypto

There aren't really any specific guidelines on when you should not sell crypto, but it is important to approach cryptocurrency with an open mind and a lot of careful planning. Even if you have a lot of technical knowledge about how a crypto exchange will work, it is easy to get wrapped up in panic-selling if the price dips.

The traditional rules of stock trading still apply, but in a new form that can be hard to adapt to. Even the Bear Market (falling market) and Bull Market (rising market) distinction can matter, but you can't rely on techniques like that to fully understand your own investments.

Remember that cryptocurrency is inherently volatile, so a coin's value can change on a daily basis - or sometimes even faster. There is always a chance that a sudden dip can be the prelude to a massive spike in value, and it is up to you to decide if you want to take that risk or not.

It helps to understand that crypto is part of a broader scale than just itself. You are not just buying the coin based on some random value - every change in coin value is caused by something. Even the largest price hits have a chance of recovering if the issue is resolved or interest in the coin increases again.