Practical Guide to Maximize Profits with ATH Trading

In cryptocurrency investing, “ATH (All Time High)” is an unavoidable concept. Recently, Bitcoin (BTC) reached a record high of $126.08K, and many investors are facing buy/sell decisions at this peak. Understanding what ATH is and how to act in this situation is key to successful investing.

Basic Understanding of ATH: What Does a New Price Record Mean?

All Time High refers to the highest price an asset has reached since trading began. The moment a cryptocurrency hits ATH is not just a numerical update; it symbolizes a bullish market and indicates that investor expectations are at their peak.

However, near ATH, psychological traps exist. Beginner investors tend to be swayed by emotions, jumping in at the top, which often results in significant losses. Conversely, experienced traders recognize that this stage is when strategic analysis is most crucial.

How to Use Technical Analysis Tools During the ATH Phase

Predicting Resistance Levels with Fibonacci Ratios

Fibonacci ratios such as 23.6%, 38.2%, 50%, 61.8%, and 78.6% are used to identify support and resistance lines. Applying Fibonacci to the price range from the lowest point to the ATH level helps identify key levels like 1.270, 1.618, 2.000, 2.618. These levels are likely points where price reversals may occur.

Moving Average (MA) Trend Determination

If the asset price falls below the MA line, it suggests a downtrend; if it stays above, an uptrend may be in progress. Observing how the price interacts with the MA around ATH helps assess the likelihood of trend continuation.

Three-Stage Process in Breakout Trading

Price movements during an ATH breakout often follow specific patterns.

Stage 1 “Action” involves the price breaking resistance levels with increased trading volume, signaling a new trend start.

Stage 2 “Reaction” occurs when the upward momentum slows, and buying pressure weakens. At this point, the price enters a correction phase, testing the sustainability of the breakout. Many short-term traders take profits here, leading to a price decline.

Stage 3 “Resolution” determines whether the breakout trend is confirmed or fails, as buying and selling momentum change significantly.

Practical Trading Rules Around ATH

Confirm Price Patterns

Identifying candlestick patterns like rounded bottoms or rectangle bottoms immediately below breakout points can increase confidence in the trend.

Pre-Set Profit-Taking Levels

Decide on target profit amounts or profit ratios beforehand, and set stop-loss points for when the price reverses. Acting based on objective numbers rather than emotions is fundamental to risk management.

Gradual Position Scaling

Only consider adding to your position when the risk-reward ratio is favorable and the price is supported by the MA line. Avoid reckless averaging during ATH phases.

Position Management Strategies at ATH

Holding All Positions

Long-term investors confident in the asset’s value may choose to hold all assets. However, it’s important to carefully analyze whether the current ATH is a temporary overextension or the start of a new trend.

Partial Profit-Taking

This is the approach most practical investors choose. Measure psychological resistance levels with Fibonacci extensions to determine selling points. It’s crucial to identify two points: the bottom that formed the previous ATH and the current ATH bottom.

Full Sale for Maximum Profit

When Fibonacci extension values align with the ATH price, it may indicate the end of the upward trend. In this case, full selling to maximize profits can be a rational decision.

Summary

ATH in cryptocurrencies is an important indicator for evaluating market conditions and making decisions aligned with individual investment goals. As Bitcoin (BTC) hits a new high of $126.08K, a strategic approach based on technical analysis rather than emotions can be the difference between profit and loss. If you have experience trading during ATH phases or have ideas and tips on position management, please share in the comments.