Bitcoin Forum

DCA (dollar cost average) is a well known way to build up a position in Bitcoin (also applicable to other assets). Once a large enough position has been built and there is a desire to exit, what are some strategies on the way out?

Let's say we've DCA'ed in for 4 years and now want out. What are some good ways to reduce your position without DCA'ing out over 4 years (again)?

If I understand it correctly, you just have to sell it then if you want out and take all of those profits.

There's no need for any complex method that you need if you're already done DCAing and you're ready to take the profits you've made after all those years.

Another thing is that just be the typical buyer when the dip comes out and sell at top, then repeat that cycle.

I guess it is actually simpler if you are averaging. If you've accumulated Bitcoin for the past 4 years, you could actually just exit in one single order. Say, you've purchased Bitcoin at an average price of $35,000 and you want to exit without taking a lot of time, you may just forget all those purchases made at a much higher price and just sell them all. You might have purchased some at $40,000, $50,000, or even higher but it won't matter much anymore because your average purchase price is much lower compared to its current price. Although, personally, I am not a fan. 

You simply sell the amount you're happy with. In the first place, selling slowly vs dumping all in one go is almost just a guessing game; unless probably when bitcoin just had a 20% candle then it'd probably be better to dump in one go. In the end though, only time will tell which one is the better decision. :P

Why not go on a 50% sell-off, take the profit and continue to DCA, but this time just shorten the time frame, lets say 2-3 years and see how it goes?

Bitcoin's price is going exponentially but it will be slow, so just sell on top (guess the price), and then rinse and repeat.

 Many financial pros recommend dollar-cost averaging when buying into a position, but it can be counterproductive when selling, as we'll see in a moment. First, let's review how dollar-cost averaging, or DCA, works. In conventional DCA, shares are purchased at regular intervals and in fixed dollar amounts over a period of time. One of the benefits of DCA is that it causes the investor to buy more shares when prices are low and fewer when they are high. DCA also reduces the volatility experienced by the investor and helps the investor avoid the temptation of trying to time the market by finding the right moment to invest a large sum all at once.

simply take the profit, Dollar cost averaging buy whenever the price goes at certain date. so there is always you buy in the dip and the high when you averaging that you will found price and sell at the high of average price.

me itself using dca and same amount at certain date so ex. i only using 100$ per month so if i invest on 12 month i will get 1200$ when i try to sell the value must of the top of it, if the final value 2000$ i take profit only 20-25% rest of it use to reinvest

A similar strategy could be adapted for selling. For example you first speculate what the top price could be using 2017 prices lets say you speculated top is going to be $10k then you place a small sell order like 10% at $9k then another bigger one like 40% at $10k itself then smaller sell orders at higher price like 10% at $11k and so on. This way you can sell at the price you predicted to be the top while still took a smaller risk selling at higher prices to maximize the profit.
You also have to accept the consequences of the decision you made such as the peak of the bubble being $20k or a couple of years later price reaching 6 times more than the price you sold at and go as high as $60k.

What was the reason for DCA instead of technical investments when technical indicators yell buy?
1- lack of trading skills
2- lack of money for single buy

If above is correct for you than there is no professional strategy good for you. You simply sell when you need money, sell when price reach your target, sell when you feel its good time to sell, reverse DCA. Does not matter. No matter what you will choose, result for inexperienced trader will always depend more on luck than on anything else.

I quite agree with you. I believe that DCA is usually for buying in gradually over a time frame but I too don't see a need to DCA again once you are trying to take the profits because you have built the portfolio over time and are in profits and all that is needed is selling all once yu fell satisfied and do DCA again after the market dips and no need to complicate the exit process. 

That would depend on you if you’re happy with what the value your investment has reached at any given time frame. But the ideal way is not to sell if you don’t need to, and wait for HyperBitcoinization. I know HyperBitcoinization sounds laughable today, but I believe Bitcoin to $100,000 sounded laughable during 2011 too. 8)

Just.. sell it one go? If you want out, you won’t be trying to think of more complex ways to get it all out. You just do it and that’s it. No need to do it slowly since you already called it quits. After all, if you already maximied your profits in that amount of time, it wouldn’t matter much if you miss a few hundred dollars just because you were being ‘impatient’. That few hundred dollars ‘loss’ may even be negligible in 4 yrs with the amount you would have gained by then.

If you're selling while Bitcoin goes up, you could start with selling less and progressively sell more and more and the chance of a bear market increases. If you're selling while Bitcoin goes down, you can do the opposite and start selling larger amounts first while the price is still high. When you are averaging you have to accept that your sell price will be lower than the ATH, but it would also protect you from selling too late or too soon and missing out on a big amount of profits.

Let me share you my personal experience here.
I have been accumulating bitcoin for the last few years, it was not DCA method but kind of buying the dip and/or buying whenever I had some excess fund. And I have sold all of my bitcoin when the price was around $35k but later on, it was 2x almost from my selling price which I was really upset with. That was a great mistake. And now I'm considering starting DCA as I don’t want to miss the potential future pump.
I would liquidate part of my bitcoin if I were you now. I recommend selling 30/40/50% in a certain range and hold the rest.

DCA out is a good strategy but just remember, most other traditional investments are in deep trouble & you’re not going to want too much cash because inflation is going to eat it. Only sell if it’s to invest in something that is going to make you money.

Bitcoin is the best place to have your money right now but obviously if you want to realise some profits then DCA out, some but never all.

That is the function of Bitcoin that you hold, sell or hold it for a long time only in your own control, not interpreted by any party. If you intend to sell it, you can do that in no time. Nothing to suggest other than going back to your wish are you ready to give up all your Bitcoin hold or still want to own some of it? Use and sell it sparingly, who knows in the future you will really need it. And I think it's bound to happen.

Honestly, ever since the institution investors join crypto currency everything seems change and the old strategies may not work in this current market but what I will advice is selling of 45% at profit price.

First, it depends on the currency invested but every crypto experiences DCA every 4year and I am yet to understand if it will continue since private companies exist in the market. However, it is better to slow sell.

Usually I use lump sum strategy when I trading. But this year I use DCA, I only use DCA when I am not sure about lowest or highest level price of bitcoin at a bullish or bearish market trend. I think we don't need complicated strategy in trading. I think you can just sell all your cryptocurrency at one time if you are sure that you can get maximum profit. If you are not really sure then you can use DCA again to sell you cryptocurrency. The most important thing is you only sell at the top of bullish market. I don't think that now is a good time, I think you should wait until the price of bitcoin is higher than now.

Dollar Cost Averaging can be used for Bitcoin and altcoins and of course you have to choose very good altcoins to DCA.

https://dcabtc.com/
https://www.blockchaincenter.net/dollar-cost-averaging/
DCA is good for long term investors. If you have weak hands, DCA does not help actually.

Sell all your crypto balance at ATH and wait for the price to crash (for example, more than 60%) then buy Bitcoin at that value and withdraw the rest as net profits.
We can give you a lot of strategies, but the problem is how to calculate taxes, which will make multiple buying and selling a loss because part of it is lost in taxes, so it is better to do it once.

Again, this advice varies depending on your country and its tax system.

Imo, the best way to achieve desired results for this scenario is to try selling a part of the position at any "assumed" all time high as there's no sure-fire way of knowing where the market will top out. If I knew about DCA back then in 2017 when $20k was still considered a very high price for Bitcoin, I would have sold majority of my positions at that price and bought throws of $3K. It's a lesson I had to learn the hard way. Plus it doesn't necessarily need to be 4 years, just depends on how long each market cycle whether bull or bearish will last.

Sometimes I also use DCA for buying but not at high price periods. If you already did it for 4 years then I think you can sell it anytime, just in case you are in desperate for money. But if not then I suggest you to sell at bullish market only. Just wait until October or November, maybe you can sell it at good price. Bitcoin price movement is very volatile and you can see it clearly from the chart. If I were you I will sell  every 10% of it at bullish market, not just based on time but also based on chart, if the graphics is fall then wait until it go up again. I hope you can get maximum profit.

DCA means you accumulate one asset with time, gradually and according to your plan. When you practice DCA, price is not a big matter with you. Because you do this plan for long term investment.

I mean if you plan to DCA with $100 every month. You can do it every month and don't care of how a price in that month is. However, if price has deep correction, you can spend more than $100 as plan to accumulate more. So you can spend $200 in a bearish month if discount is big in your opinion.

https://dcabtc.com/

Depends on his requirements. If I draw a parallel with the equity markets, you have both Systematic Investment Plans as well as Systematic Disinvestment Plans. You could withdraw (sell your bitcoins) your invested funds in small amounts, at regular intervals. This has the effect of averaging out the price while selling as well.

I personally practicing DCA but since there are two types of market situation in bitcoin which is bearish and bullish then it seems that I practicing different DCA. If I push to buy using DCA while the market is bullish then I will buy BTC at high price, in my opinion it is not so smart. I prefer like to hold my fund until bearish market happen. So I will buy btc at cheap price it also make me get good position in trading. I think it will be good if you sell only in bullish market. As a trader I think you will be happy if you sell your  btc at high price. I trying to not to be too rigid, I realize that sometime bitcoin will surpass ATH and fall after that. So you can start to sell if btc price surpass ATH point, don't blindly follow theoreticall way, just make it simple.