The majority of Bitcoin’s gains during past bull markets happened over a span of about 30 days. In both the 2013 and 2017 run-up, there was a window of roughly 4 weeks/30 days that accounted for the majority of the price appreciation from the entire bull cycle. This small window is not the time to be thinking about what your plan is moving forward. It will be the time to execute a plan you crafted well in advance of a bear market.

The Finale Comes Quick

On 11/11/2017, Bitcoin was sitting comfortably around $5,950 after a slow march from $1,000 earlier in the year. Yes, there were massive gains to be made over those 11 months, but it was steady – a very different climate from what came next. From November 11th to early December, Bitcoin’s price action began to move in only one direction, directly north. By December 6th, Bitcoin nearly reached $18,000, a 3x in less than a month. Over the next week, the asset continued to rise another $2,000 to record a new all-time high of just under $20,000 depending on the exchange you were tracking the asset.

You can probably imagine the pandemonium and euphoria that ensued when this took place. Everyone without a plan was left behind, in shock. Now that we are in a new cycle, it’s a matter of when, not if, this happens again. Treat this blog as your guidebook for what could be next. Small decisions in this crucial time will have really big impacts. 

As I often say, investors should be doing nothing 99% of the time. However, as both a trader and investor, when the parabolic move arrives, how you react can either result in a massive leap forward or a possible setback for the years to come. If you don’t have a plan when the market goes truly NUTS, you will be susceptible to believing the crowd’s opinion which is almost always going to steer you wrong.

Even worse, is the chance you can’t act when you need to most due to a technical reason or user error. This is why you should be logging into your crypto account once a month to be in the habit of maintaining simple access. You don’t want to find out you have expired information on your account, or your password is misplaced when time matters most.

As this cycle’s parabolic window approaches, there will be a very vocal crowd calling for much higher levels while the market is sitting at the literal top. Yes, there is a possibility Bitcoin hits +$300,000, but likely not a million on this cycle. The crowd pushes for $500,000 – $1 million are quiet right now, but expect their voices to become louder and more popular as Bitcoin moves up. In 2017, when Bitcoin was approaching $20,000, everyone was screaming that $100,000 was inevitable. The majority of retail bought into this narrative and missed their chance to sell.

Ask any retail trader how close to the top they sold in 2017. You will be hard-pressed to find an honest answer of someone who unloaded their crypto around the top or somewhat close to it. Everyone anticipated more, and it never came. To put matters into perspective, we still have not made it to $100,000.

HODL or Sell?

That is why a plan for the end of this bull market and the next bear market is essential. If you plan to be a long-term HODLER, then just prepare emotionally for the drawdown, accumulate cash to buy more, and believe that price will eventually return. Easy. 

If your plan is to exit, either have a set number in mind and be willing to wait however long it takes, or scale-out of your current position as the market rises. Let’s consider how to scale out of the market below.

If you are scaling out, you will be most likely be slightly “too early” or “too late.” If you are patient with your scaling, you should be selling near the end of the run-up and beginning of the way down. This is a nearly optimal outcome for everyone trying to “time the market.” If you think you are going to sell your entire portfolio at the top, you are wrong and almost guaranteed to fail. 

Take a look at the volatility at the end of the 2017 bull market. In a month’s time, Bitcoin dropped from over $19,000 to the low $13,000’s then back to $17,500. The bulls were caught in this epic trap, and we can probably expect something similar this time around. Perhaps $200,000 → $120,000 → $175,00 or a similar iteration. Now let’s examine all the factors that matter when it comes to selling around a bear market.

The Possible Scenarios

Bitcoin’s cycle top:

  • Option A – Bitcoin tops out at $150,000 (low end)
  • Option B – Bitcoin tops out at $250,000 (average of many predictions)
  • Option C – Bitcoin tops out at $450,000 (realistic supercycle)

Did you sell?

  • Option A – No you held
  • Option B – Yes, all at once (not a useful strategy for most people)
  • Option C – Yes, I scaled out (better strategy for 95% of people)

How close to the top was your selling average?

  • Option A – Within 10%
  • Option B – Within 20%
  • Option C – Within 33%

If you sold you are paying capital gains tax:

  • Option A – ≈40% (short-term capital gains, U.S. based)
  • Option B – ≈20% (long-term capital gains, U.S. based)
  • Option C – ??% (moved out of the country, took a loan, set up a charity)

Bitcoin enters a bear market:

  • Option A – Bitcoin drops 50% (low end, assumes mild correction/price floor)
  • Option B – Bitcoin drops +80% (on par with all other major drops)

From the above set of events, there are probably hundreds of different combinations, thousands of variations not mentioned, and infinite outcomes. Be honest with yourself, 1/1,000,000 are going to achieve all the favorable outcomes. But also, be confident with yourself. Some of the scenarios are well within your control. If you are reading this, you won’t even be close to dead last.

Best Outcome

Let’s take a look at a portfolio worth 2 Bitcoin ($86,000 as of the time writing this) that gets all favorable outcomes above.

Bitcoin supercycles to $450,000, you sell everything 10% from the top, you pay long-term capital gains tax, and Bitcoin enters a large bear market that you avoided. You can now buy back far more than you started with or move your capital elsewhere.

This is a HUGE win. In the U.S., you would walk away with roughly $640,000 after taxes and fees. If Bitcoin dropped 80% in this scenario, it would hit $90,000, and you could purchase over 7 Bitcoins from your initial 2 if you chose to. This buyback is generous considering you would have to time the bottom perfectly, but realistically, you should be able to at least purchase 5 Bitcoins.

Realistic Outcome

Let’s take a look at a portfolio worth 2 Bitcoin ($86,000 as of the time writing this) that gets more realistic outcomes above.

Bitcoin climbs to $250,000; you scale-out successfully averaging 25% from the top, you pay long-term capital gains tax, and Bitcoin drops 80% from its high.

In the U.S., you would walk away with roughly $300,000 after taxes and fees. If Bitcoin dropped 80% in this scenario, it would hit $50,000, you person can now purchase 6 Bitcoins from your initial 2. Again, this is generous, but realistically, you should be able to double up to 4 Bitcoins.

Worst Case Scenario

Let’s take a look at a portfolio worth 2 Bitcoin ($86,000 as of the time writing this) that gets the worst outcomes above.

Bitcoin only hits $150,000, you sold all at once 33% from the top, you are paying short-term capital gains tax, and Bitcoin only drops 50% from the top.

After doing the calculations, you would walk away with $120,600 after taxes and fees. If Bitcoin dropped 50% from this scenario, it would hit $75,000, you can now only purchase 1.6 Bitcoins from your initial 2. Realistically, it would be closer to 1.25 Bitcoins. This is a losing scenario, but only by a small margin when you consider that every possibility went wrong. So, what does this tell us?


In most selling scenarios, even after paying taxes, fees, and considering you won’t be perfect buying back, you will probably come out ahead. If you have just even a little faith you won’t make every bad decision and long-term capital gains are on your side, selling might be your better option. Not selling will guarantee you reach long-term capital gains, but you have to be comfortable sitting on investment for the full unknown duration of a bear market watching it shrink in size – this could be +2 years. The choice is yours. If you are an altcoin holder, expect all the scenarios to be stretched out in both directions. All the same rules still apply, but at bigger stakes, bigger risk, and bigger rewards.

Take today, this weekend, or this month to figure out what your plan is. Investing is a game of making a few good decisions, a few times over a lifetime, and having the strength to follow through. To play the game well means planning far in advance. Be realistic about your portfolio and honest with yourself. Where do you stand?