Perhaps one of the most asked questions in cryptocurrency for traders is when do I sell? The famous saying, “Lost time is never found again” cannot be more accurate in cryptocurrency. Out of many fundamental lessons in cryptocurrency, choosing the best and most profitable time to sell cryptocurrency has the utmost importance. And, making decisions at the wrong time can give you daunting nightmares. It is one of the many mistakes crypto traders attempt, either in hassle or lack of knowledge.
Keeping in mind the buy low, sell high formula, the very first step to find the right time is to see options around you. Set a target selling price for your crypto, which should obviously be more than what you bought for. Also, implementing a stop-loss strategy proves a helpful option in choosing the right selling price for your coin.
There are things to consider before selling crypto:
- The logic is also that by selling and taking profits now, you can swoop back in and buy more at a later did when the dust settles. No one can really predict the wild swings of Crypto and the smaller or newer a digital coin, the more the volatility. Which could mean huge upside or big time downside. So selling now, and coming back later could be a prudent move if you want to convert some of your digital gains to real US dollars in your bank account.
- How much will you sell? You don’t need to sell everything, especially if it has increased in value. You could sell a portion of your holdings to rebalance your portfolio and hang on to the rest if you still think the cryptocurrency will be a winner going forward.
- What are the tax implications? The one other thing to consider is the tax implications of selling. If the cryptocurrency has increased in value, you’ll owe crypto taxes. It’s taxed as long-term gains if you held the crypto for more than 12 months. Right now any unsold positions equal unrealized gains or losses. But as soon as you sell you may have a significant tax bill, especially if you bought a long time ago. So you need to ensure you keep some of your proceeds around to pay estimated taxes or have it ready for filing time.
When in doubt, hold (or “hodl” as some say). With all that is going on and 25% swings up and down on a daily basis, holding could be the best option. This is particularly the case if you have only invested a relatively small amount and can ride out the short term swings because you think longer term, one or more of the Cryptocurrencies are here to stay and will become a core part of the financial ecosystem.
Selling your coin when it reaches a skyrocketing price is nothing else than a fantasy that you must replace by taking practical, factual, and scalable decisions. Keep in mind the factors when choosing the most suitable time to sell your cryptocurrency with the least risk and highly profitable returns.
