Risk-on-risk-off are thrown about fairly frequently with regard to market sentiment. But how can understanding them help you make better investment decisions? 

In the trading world, the terms "risk-on" and "risk-off" are thrown about fairly frequently with regard to 

. But what do these terms mean and how can understanding them help you make better investment decisions? 

In this article, we'll dive deeper into the meaning of risk-on and risk-off and explore what they can tell us about the financial markets.

When market participants say the market is in a "risk-on" phase, it signals that investors are optimistic and willing to accommodate more risk in their investments. Investors express this sentiment in various forms, such as a shift in preference towards stocks over bonds or a greater inclination towards investing in emerging market stocks rather than developed market stocks. 

One example of a risk-on regime is the period of 

 in the United States between 2001 and 2007. During this time, investors were willing to invest in more speculative assets, such as real estate and technology stocks, to achieve higher returns. This led to an increase in housing prices and a stock market rally, which ultimately ended in the financial crisis of 2008.

Essentially, during a risk-on phase, investors are willing to take on more volatility to achieve higher returns which drives the price of riskier assets up. Investors perceive a bullish economy and believe that the potential for higher returns outweighs the risks of higher market volatility. 

When the market is considered "risk-off," investors are becoming increasingly cautious and looking to lower their exposure to potential losses. Risk-off sentiments show up in several ways, such as shifting investments from stocks to bonds or emerging market stocks to established market stocks. Investors crave more investment stability and are willing to accept lower returns as a trade-off for this increased safety.

During a risk-off period, investors may be more likely to move funds into safer investments, such as government bonds, which tend to be less volatile than other bonds or stocks. They may also choose to invest in utility stocks, which are seen as defensive investments that tend to perform well in a downturn.

In the run-up to the U.S. presidential election of November 2016, the financial markets viewed a Donald Trump victory as a 

 than the election of Hillary Clinton. As a result, as the media released more news in Trump's favor, investors became more risk-averse, moving their assets into less risky investments.

Generally, a risk-off market is characterized by a decrease in stock prices and an increase in bond prices. This is because when investors feel more cautious, they will tend to sell stocks and buy bonds which are considered safer investments. It can also portend an upcoming recession or economic downturn.

It's important to note that the terms "risk-off" and "risk-on" are relative and can change depending on the market conditions and investors' sentiment. They are not permanent states but describe temporary market conditions.

 is known for its high level of volatility, with prices that can fluctuate quickly and often dramatically. It is not backed by any physical assets or government and has no central authority regulating it. The lack of regulation and oversight can make it a riskier investment than traditional assets such as stocks or bonds.

Additionally, the value of Bitcoin is determined primarily by supply and demand in the market, which can be influenced by multiple factors such as market speculation, technological and regulatory changes and global economic conditions.

Generally, Bitcoin is considered a high-risk, high-reward investment, and it would fall in the "risk-on" category. 

However, for some Bitcoin purists, its sound money properties and potential as a store of value make it a risk-off asset. As a result, the jury is still out on a definitive risk-on, risk-off classification of Bitcoin.

Typical "risk-off" assets are investments considered safer and less volatile than other investments. When investors are spooked and feel more cautious, they reduce their exposure to potential losses by seeking out these assets. Some examples of "risk-off" assets include:

Is Risk-On Risk-Off A Good Indicator of Market Sentiment?

The "risk-on, risk-off" terminology is often used to describe market sentiment and investors' preferences for riskier or safer investments. 

However, while the “risk-on, risk-off” classification can be a valuable description of market sentiments, it takes a broad brush to describe market changes. Other indicators, such as economic data, corporate earnings and political developments, can also shape market sentiment. It's also important to remember that market sentiment is not binary. It's a spectrum of emotion, with different degrees of risk-on and risk-off.

Overall, although the "risk-on, risk-off" terminology can provide some insight into market sentiment, it should not be used as the sole indicator of market sentiment. Investors should also consider additional nuances in the market, like company-specific news, when making investment decisions.

The Risk-On vs. Risk-Off Approach to Market Sentiment

"Risk-on" and "risk-off" are commonly used to describe market sentiment. These terms indicate changes in investment activity influenced by more significant shifts, such as in the broader economy. When the market is risk-on, investors feel confident and are willing to take on more risk. On the contrary, investors feel more cautious when the market is risk-off and want to reduce their risk exposure. 

While the “risk-on, risk-off” classification can be a helpful indicator of market sentiment, it's important to remember that you can drill down deeper into the cause. Macroeconomic data, corporate earnings, government policies and other factors can trigger market sentiment changes.

Intermediate

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Risk-on vs. Risk-off: What Do They Mean?

Not sure what to do after the Ethereum Merge? Read on as we offer post-Merge price predictions for Ethereum and suggest trading strategies that you can adopt.

As the first-ever post-Merge upgrade for 

 is a major step in the right direction for the popular smart contract network. In essence, it aims to enhance the world’s second-largest cryptocurrency project by delivering upon previously made liquidity promises and general improvements that make interacting with 

Keen on learning more about how the Ethereum Shanghai network upgrade impacts 

’s price post Ethereum Merge? In this article, we go through why everyone’s excited about it and the possible courses of action you can consider taking after the network upgrade is completed.

Prior to The Merge, there was another network running parallel to the Ethereum chain known as the Beacon Chain, which uses a PoS consensus layer. Upon The Merge, The PoW Ethereum chain merged with the Beacon Chain. This means that blocks on Ethereum will only be produced through the Beacon Chain using its PoS consensus model. 

Why Was Everyone Excited About the Ethereum Merge?

After a six-year wait, Ethereum finally merged with its Beacon Chain to become a PoS blockchain on Sep 15, 2022. The Merge made the Ethereum blockchain faster, more scalable and more efficient. This highly anticipated event had driven up the hype among investors, raising enthusiasm and causing the price of ETH to soar just before the actual Ethereum Merge since its lows in June 2022.

As a result of The Merge, the blockchain is now more energy efficient as the PoS mechanism uses roughly 99% less energy than the power-hungry PoW mechanism. It’s believed that The Merge is also going to reduce processing times, lower transaction fees and help the blockchain scale in the future.

After The Merge, rewards no longer goes to miners. They go to stakers instead, which levels the playing field for Ethereum community members and network participants. Instead of an expensive mining rig, all one needs to be a validator is to simply stake 32 ETH and some simple software. This offers greater decentralization and security, as it is now cheaper and easier to run a node in the future. In addition, utilizing PoS opens the door for scalability via sharding, which may someday allow for up to 100,000 

The supply of Ethereum could turn deflationary in the future if more ETH is burned during transactions than distributed through inflation. This depends on the activities that occur on-chain, and whether users feel incentivized to use the Ethereum blockchain over other Layer 1 blockchains. However, the Ethereum Foundation has said that the change in consensus mechanism will have little impact on transaction fees. 

Ethereum has planned a number of major network upgrades following the Merge — Surge, Verge, Purge and Splurge. 

The first upgrade, Surge, will implement sharding to improve the scalability of the Ethereum network as a whole. It includes the Ethereum Shanghai upgrade, which acts like a primer that prepares Ethereum for what is to come post-Merge and is expected to be executed by March 2023. The Ethereum Shanghai upgrade grants validators the ability to withdraw their staked ETH from the Beacon Chain. 

. This upgrade provides smaller and thus more efficient proof sizes, allowing more users to become validators as less data storage is required with smaller proof sizes.

The Purge will remove the use of nodes to store Ethereum transaction history, thereby helping validators free up the spaces in their hard drives.

The final upgrade, Splurge, will help to ensure that the previous four upgrades are carried out smoothly.

Post Ethereum Merge Price Prediction: 3 Potential Outcomes

Ethereum after The Merge generated a lot of hype and speculation as traders wondered how ETH prices would react to the hotly anticipated upgrade. Since taking a huge tumble on Sep 15, 2022 after The Merge was executed, ETH’s price has recovered considerably and currently sits at $1,557 at this time of writing (Jan 17, 2023). With the Ethereum Shanghai upgrade on the horizon, speculators can’t help but predict how ETH will react to this network upgrade.

In the grand scheme of things, the Shanghai upgrade will certainly boost Ethereum’s potential as the preferred smart contract platform as nagging issues like lack of staked ETH withdrawals and wasted gas fees are fixed. However, when considering a shorter time frame, ETH prices could definitely whiplash thanks to the volatility involved.

Keen to learn how to trade the volatility in the meantime? To take advantage of the massive instability after the Shanghai upgrade is executed, we’ll take a look at three potential outcomes and what you can do as a retail trader in each of these specific circumstances.

Before diving in, here’s an overarching table that summarizes each trading strategy in a nutshell:

Bullish Post-Merge Ethereum Price Prediction

Following the Ethereum Merge, four other upgrades are to follow according to the project’s official roadmap. These are meant to improve Ethereum's long-standing stability and scalability. According to Ethereum co-founder Vitalik Buterin's comments during the 

, the Surge will boost Ethereum's transactions per second (

), allowing it to hit 100,000 TPS. This will be achieved as the smart contract platform integrates the use of 

 through sharding to boost scalability. In order to achieve this scalability goal and successfully implement the Surge, delays must be minimized where possible. That's where the execution of the Ethereum Shanghai upgrade comes in.

If the Ethereum Shanghai network upgrade happens without a hitch, this would certainly be bullish for the price of ETH. Investors might start to pile in once they hear the good news about how Ethereum is progressing with its roadmap. Additionally, thanks to the possibility of withdrawals, more users could choose to stake their ETH without fear of their ETH being locked away. This would improve the security of the Ethereum network and make ETH increasingly deflationary as more validators begin staking among the crypto community.

Optimal ETH Option Strategy: Bull Call Spread

If you’re bullish and believe that the market is still underpricing ETH upon the Shanghai upgrade's completion, an optimal ETH option strategy would be the Bull Call Spread on Bybit. To open such a derivatives strategy, you’ll have to first buy an ATM call option that’s far from expiry and then sell an OTM call option that’s of the same expiry date. 

Overall, this trading strategy is popular among traders because it limits your losses while ensuring a huge upside should ETH prices trend upward.

First, buy an ATM ETH call at a strike price of $1,500 that expires at the end of March. Next, sell an OTM ETH call option that’s expiring at the end of March. In terms of the strike price, we’d suggest looking at contracts between $1,600 to $1,800 as this falls within the 0.1 to 0.2 delta range.

 Difference Between The Call Strikes - Net Debit Paid

 Long Call Strike Price - Net Premium Paid

Bearish Post-Merge Ethereum Price Prediction

If our bullish post-Merge Ethereum price prediction seems a bit too ideal for your liking, don't fret, our bearish price prediction has you covered. On the opposite end of the spectrum, staked ETH withdrawals could mean a massive dump in ETH prices as close to 16 million ETH locked away since December 2020 await withdrawing. This is because ETH prices have nearly tripled since they were originally staked and it would make sense for ETH investors who originally staked their ETH to take profit. Ultimately, such profit-taking behavior would cause ETH prices to dump in a "buy the rumor, sell the news" manner that's similar to how ETH reacted post-Merge.

Optimal ETH Option Strategy: Bear Put Spread

If you’re bearish about the Ethereum Shanghai upgrade and believe that traders will withdraw their ETH and take profit, you can maximize your profit by opening a 

A bear put spread essentially means that you buy a put option and sell an additional out-of-the-money put option with the same expiration date. It’s designed to help traders profit from assets which are decreasing in value. A bear put spread is cheaper than buying a put option only, and benefits from the price of ETH falling in addition to the time decay of the short option.

To open the trade, first buy an ATM ETH put contract with a strike price of $1,600 that expires at the end of March. 

Next, sell an ETH put contract that also has a similar expiry. When it comes to the strike price, we recommend selecting a put contract between $1,300 to $1,500 as these put contracts fall within the 0.1 to 0.2 delta range.

Difference Between The Put Strikes - Net Debit Paid

Long Put Strike Price - Net Premium Paid (Premium Paid - Premium Sold)

Neutral Post-Merge Ethereum Price Prediction

In a circumstance where the catalyst has been priced in, the price action would remain neutral, neither rising nor falling much. Investors might HODL their ETH through the Ethereum Shanghai upgrade, as they believe in its long-term appreciation. Furthermore, it wouldn't make sense for long-term investors to sell close to the bottom during a crypto bear market. If there happens to be little buying or selling pressure, this would thus cause the price of ETH to remain flat.

Also, to support this neutral Ethereum Shanghai upgrade price prediction, many ETH enthusiasts see this as a minor upgrade in comparison to the Surge. Therefore, there'd be little reason for there to be huge spikes in prices if this mindset holds true.

Optimal ETH Option Strategy: Cash-and-Carry Arbitrage Trade

Noticing the upgrade news impacting the sentiment of ETH futures? Cash-and-Carry Arbitrage trades are the optimal way to profit from this as you take advantage of the price difference between the Futures and Spot prices.

Thanks to their market neutrality, traders will minimize volatility and guarantee small but risk-free profits with each trade. Do take note that this arbitrage trade will only be viable if the short Futures position exceeds the cost of the long Spot position.

To begin, buy multiple ETH for $1,580 to establish your long Spot position. Then sell an equal number ETH MAR Futures contract for $1,586. With each arbitrage trade, you'll be profiting about $6 from each spread. By performing this near risk-free trade, you’re exploiting the existing sentiment and profiting without exposure to any directional risk.

With the Ethereum Shanghai upgrade having an estimated March 2023 execution date, ETH stakers have until then before they’re finally able to regain their liquidity and withdraw their staked ETH. Keen on also staking your ETH but don’t want to lock in your assets in the meantime? Make sure to check out 

 for our flexible staking ETH product. Unlike the conventional means of staking ETH, participants are granted full liquidity as they can stake and withdraw their ETH for however long they may want. This will grant you some bonus yield on your ETH as you HODL through volatile times.

Here’s how you can start earning yield on your ETH with Bybit:

Your first rewards payout should appear two days after each deposit. Your rewards payout depends on the amount of ETH staked, and should appear daily after your yield has been calculated.

Overall, Ethereum post-Merge shows that it is fantastic for long-term investors with the Ethereum Shanghai upgrade. By granting liquidity and tidying up loose ends, Ethereum's future as a 

 has never looked brighter. Yet one can't help but wonder about Ethereum's price in the future in light of current bleak macroeconomic conditions. That's why, in addition to HODLing, crypto traders can take advantage of any near-term catalysts to generate extra yield and make the most out of the situation.

Whether you’re a long-term investor or short-term speculator when looking at our post-Merge Ethereum price predictions, you can invest in ETH and all other kinds of cryptocurrencies by 

 and beginning your crypto investing journey today.

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Ethereum Price Prediction: How To Trade ETH Post-Merge

Excited about the Vasil upgrade? Find out more about Cardano's Vasil hard fork and how you can profit from it with out ADA trading strategies.

As Cardano pushes toward their latest major upgrade, the Vasil hard fork aims to improve the network by making it faster, more functional and secure. 

According to the team, the Vasil hard fork, previously said to come in June, is set to go live on September 22 or about a week after The Merge takes place. Read on as we detail what is in store for Cardano and the possible courses of action you can consider to take advantage of the upcoming volatility.

The Cardano Vasil Hard Fork is an upgrade in which the Cardano network will become more robust and scalable as it fixes security loopholes, boost connectivity, and improve the overall functionality of the network.

In 2021, Cardano introduced smart contract compatibility after their previous upgrade known as the Alonzo hard fork. This feature has greatly helped the Cardano ecosystem as many new decentralized applications (DApps) are now building their platforms on the Cardano blockchain.

How will the Vasil Hard Fork improve Cardano?

Prior to the upgrade, there were several Cardano Improvement Proposals (CIPs) posted on the forum on how to improve the overall state of the Cardano blockchain. The Vasil hard fork will roll out many of these CIPs and work on fixing any bugs or security loopholes. There were three critical improvement proposals made in line with one another: CIP 31, CIP 32, and CIP 33.

CIP 31 introduces a new reference input to facilitate access to information stored on the Cardano blockchain and allows anyone to look up outputs without processing them. This means that DApps can now access transactional output without having to recreate it as before.

CIP 32 is simple and aims to bring an on-chain data storage feature for the community and developers. This is expected to improve the decentralization of Cardano's structure.

CIP 33 will allow for lighter transactions, quicker processing and lower fees. It points the Cardano Virtual Machine to a reference script instead of having to include the whole script with the transaction. Since apps built on the blockchain are written in a programming language known as Haskell, it has to be converted into a different language for smart contract compatibility. This results in slower performance and increased cost when making transactions due to the additional transfer of app logic along with the transaction. 

Other small improvements include CIP 40 and diffusion pipelining. CIP 40 will introduce a new type of output transaction and diffusion pipelining is said to improve block transmission without full validation. All of these changes put simply, will increase the throughput of Cardano and improve the development of smart contracts and DApps.

The Vasil hard fork has been getting a lot of attention from the Cardano community. While the upgrade is largely overshadowed by The Merge, we‘ll explore three potential outcomes of the Vasil hard fork and what you can do with each strategy. For reference, we’ll be using ADA's price as of 15th September 2022, which is at $0.47.

Before diving into specifics, here’s a table that summarizes each trading strategy:

According to Cardano's founder Hoskinson, the Vasil hard fork will be the most complicated upgrade in Cardano's history. The current upgrade will include changes to their smart contract language and new primitives to further optimize the blockchain.

The crypto community is very optimistic about the upgrade and expects the price of Cardano to move upward from now until the end of September. It is clear that hard forks have been a catalyst in pushing the price of ADA up previously. Of the last two upgrades, ADA prices have soared by more than 10 times, and the latest Alonzo hard fork in 2021 saw the price of Cardano soar more than 3 times in less than 3 months. 

Additionally, the blockchain is set to become a developer's paradise which could eventually lead to more usage of the blockchain should useful DApps start to appear on Cardano. This is a positive sign for investors and some might look to pick up some ADA if the hard fork commences as scheduled on September 22.

Optimal Strategy: Stop Market Leveraged Long Order

If you’re bullish about the Vasil hard fork following its previous trends and believe that the price of ADA will once again soar upon a successful upgrade, an optimal strategy would buy a leveraged perpetual token ADA2L on Bybit. To open a stop market long order, you have to change your order type from 

 then set your entry above the resistance levels for ADA and choose the amount you would like to enter into the trade.

This strategy is designed to help short term investors take advantage of leveraged positions to increase their profit when an asset goes up in value. Leveraged tokens have rebalancing mechanisms and could be seen as buying into perpetual contracts without the risk of liquidation.

First, check the ADA chart for an area with strong resistance. You can use an indicator like the 20 Weekly Moving Average which shows a strong resistance for ADA between $0.51 and $0.58.

To open the trade, ensure that you have funds in your Bybit Spot Trading wallet. Next, buy the ADA2L leveraged token above the resistance area at a price of your choice, using the stop market order. This would tell the exchange to execute your order if ADA goes above your price target.

 Difference between Entry - Exit before rebalancing

Sometimes there might be unforeseen problems before the upgrade which could cause sentiments to turn negative. We have seen this with the Vasil hard fork previously as it was originally pushed from June to July and now to September. 

While some think the Ethereum merge could be beneficial for the price of Cardano, many believe a successful merge could see ETH taking market share away from ADA, this could cause a bearish short term outlook for Cardano regardless of the completion of the upcoming Vasil hard fork.

Another bearish factor could be the lack of developer interest after the upgrade, which could be due to the complexity of their programming language. As one of the slower growing Layer 1 ecosystems, Cardano has seen competitors like Solana and Near grow over 4 times in developer size despite having a much smaller market cap than Cardano.

Optimal Strategy: Stop Market Leveraged Short Order

If you’re bearish about the Vasil hard fork and believe the hype around it will fizzle out after the upgrade, you can set a stop market short order on Bybit. A leveraged short order is the opposite of our previous example, which means that you will be entering a short position of ADAUSDT perpetual contracts with leverage.

It’s designed to help short term investors take advantage of leveraged positions to increase their profit when an asset goes down in value. Entering a short position with leveraged can be safer than purchasing the underlying contract as there is no margin or liquidation price to worry about.

First, check the ADA chart for an area with strong support. Similarly, you can use an indicator like the Fibonacci Retracement which shows strong support for ADA at around $0.43.

To open the trade, ensure that you have funds in your Bybit Spot Trading wallet. Next, buy the ADA2S leveraged token below the support area at a price of your choice, using the stop market order. This would tell the exchange to execute your order if ADA goes below your price target.

While this seems unlikely to happen due to historical data, we should not leave out the possibility of a non-event. This happens when the market decides on the value of a coin before its event and moves before anything occurs. In this situation, the price would trade sideways which means ADA would neither pump nor dump.

Since you can stake ADA on Cardano without sending your coins out (unlike Ethereum), long term holders might continue to stake their ADA while earning yield. This combined with a low buying pressure could cause the price of ADA to stay neutral. This could be possible as Cardano has been known to roll out developments at a slower pace and the community could just see the Vasil hard fork as another upgrade among many others in the future.

This is a popular neutral strategy that involves buying spot assets, staking them and shorting the same amount of assets. This would allow you to earn from the staking yield instead and ignore any price movements. 

. If you still have USD, you can short the same USD amount on 

 to hedge your position, and proceed to stake your ADA. If you don't have anymore USD, you can use half the ADA you bought and short it on 

 to hedge your position, and stake the remaining half to earn staking rewards. Both methods will ensure you are delta neutral, but do take note of funding rates and liquidation prices. 

You can also hedge using leveraged tokens but ensure you use half the amount as they are innately leveraged, however, because they get rebalanced daily, it is not recommended for long term holds. 

As Cardano runs on a PoS blockchain, you can earn yield on your ADA by staking them with 

. Similar to our other staking products, you won't be able to trade, send or sell the amount you’ve staked, but you may withdraw your ADA balance at any time unless you’ve chosen fixed term staking.

Here’s how you can start earning yield on your ADA with Bybit:

Your first rewards payout should appear two days after each deposit. Your reward payout depends on the amount of ADA staked, and should appear daily after your yield has been calculated.

Like all major upgrades, the hype around Cardano will rise as the date draws near. If you decide to pick up some ADA, it’s worth looking through the above strategies and how you can use them in the event of a bullish or bearish market reaction. Should this upgrade be successful with no delays, Cardano could become a serious competitor to Ethereum and steal some market share even after The Merge.

Cardano has been maintaining its position well in the top 10 cryptocurrency spots. However, similar to post-merge Ethereum, Cardano still has a long way to go as the Layer 1 is known for pushing out developments at its own pace. The Vasil hard fork is a step in the right direction, but if Cardano wants to hold its spot among the top cryptocurrencies, it will need to get more users onboard to its ecosystem.

Whether you’re a long-term investor or short-term speculator, you can invest in ADA and other kinds of cryptocurrencies by 

 to begin your crypto investing journey today.

For an abridged version of our recommended trading strategies, check out our handy infographic below.

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Cardano Vasil Hard Fork: 3 Trading Strategies To Consider

In the green and want to lock in your gains? Make sure to quit while you're ahead with these crypto take-profit strategies.

, creating endless opportunities for buying, selling, and taking profits when the time is right. While there's no magic formula for timing the market and knowing when to take crypto profits and get out or when to stay put, there are several tips and strategies you can employ to maximize your gains when taking profits in crypto.

If you're thinking of taking your crypto profits, but aren't sure how or when to do it because you lack the right crypto profit taking strategy, we’ve got you covered. From when to sell your crypto to maximizing your gains, learning how to take your crypto profits is fundamental to your trading success.

Taking profits is the deliberate act of selling crypto or another security in an effort to lock in gains after a period of appreciation. Unlike HODLing, it often involves regular trading and market participation.

The HODL strategy for taking profits in crypto also leaves a heap of coins on the table. Even more than with stocks and other investments, coins go through a number of peaks and valleys before arriving at a particular price. Investors who know how and when to take crypto profits can take advantage of these rises and dips and increase their pot by a substantial amount of coin, while taking profits along the way.

In addition to earning regular income and growing your crypto portfolio, taking profits in crypto will also help you avoid some common HODL pitfalls — one of which is buying the tops. Many new HODL investors make the mistake of buying at the end of a trend, which means they have to suffer through some turbulent price corrections and watch their coin decrease by 25 percent or more. This psychological hurdle is tough to overcome.

Most HODLers also don't know how to take crypto profits when the time comes. Since they have little experience, and no solid crypto profit-taking strategy to follow, HODLers often buy and sell at the wrong time, diminishing their potential profits.

By following a proven crypto profit-taking strategy, and understanding how and when to take crypto profits by utilizing both fundamental and technical analysis, you can master the markets and profit handsomely from the volatility crypto has become famous for.

Pros and Cons of Taking Profits in Crypto

Cryptocurrency is wildly volatile. Unlike 

or stocks, double-digit gains (or losses) are a common occurrence. In fact, it's common to see your account jump up or down by two percent just minutes after hitting the buy or sell button. Taking profits in crypto by following a proven crypto profit-taking strategy will let you take advantage of these opportunities, and outpace a HODLer in no time at all.

Pros of taking profits in crypto are as follows:

• Earn revenue while growing crypto holdings

• Take advantage of every market condition

• Learn how to take crypto profits and become an expert trader

That said, taking profits in crypto can be challenging if you don't know how and when to take them. Fortunately, developing a strong crypto profit-taking strategy isn't very difficult once you understand support and resistance, Fibonacci levels, pivot points, and other key fundamentals of 

Without proper understanding of these trading basics, however, the odds of becoming a successful trader and being able to take profits are greatly reduced.

• Requires an understanding of technical analysis

• Must follow a proven crypto profit-taking strategy

Many newer crypto investors and traders have a hard time deciding when to take crypto profits. While knowing precisely when to enter and exit a trade largely comes down to understanding price charts and technical analysis, there are a few general signals to watch for.

Another good example of when to take crypto profits is when the price of Bitcoin or another crypto you're vested in stagnates and loses upward momentum. This usually leads to price consolidation, which should serve as a possible exit signal in your crypto profit-taking strategy. However, you should wait for confirmation from another indicator prior to placing a sell order.

Similar to a change in fundamentals, your crypto profit-taking strategy should also account for changing or uncertain macroeconomic conditions. Events such as wars, pandemics and recessions can have a significant effect on the stock, commodities, FX and crypto markets. Any of these can cause major market disruptions, and can give clear signals for when to take crypto profits rather than watch them disappear.

Deciding when to take crypto profits based on fundamentals or macroeconomic conditions is one thing, but determining exactly 

 to take crypto profits is quite another. Do you set a random take-profit after a certain percentage gain, or should your crypto profit-taking strategy involve taking profits in crypto at certain areas of resistance — or by utilizing 

 and Fibonacci levels? Smart traders use all of the above.

At some point, every trade has an exit. Entering a trade is easy, but where and how you exit determines how much you profit — or lose.

When taking profits in crypto, trades can be closed according to a crypto profit-taking strategy involving the use of trailing 

 and profit targets when specific conditions are met.

Depending on your crypto profit-taking strategy, the profit target can be a specific price target or a percentage-based target. Regardless, when the price of the crypto reaches a predetermined level, the trade can be closed either manually or automatically by entering a specific target profit during trade execution.

For example, if you purchase Bitcoin at $31,710 and have a profit target of two percent, you would place an order to sell at $32,344. If the price of Bitcoin reaches this target level, the trade is closed. In a nutshell, that's how to take crypto profits with price targets.

Taking profits in crypto with this crypto profit-taking strategy also allows you to calculate a risk/reward ratio prior to entering a trade. To do so, you need to enter a stop-loss, which should ideally represent less of a price change than your profit target. This way, the reward will outweigh the risk.

Although you can never know 100 percent whether a trade will be a winner or a loser, you'll be more likely to turn a profit when your reward is greater than your risk. For instance, if your average winning trade is $11 and your average losing trade is $6, you only need to win around 40 percent of your trades to earn an overall profit.

Taking profits in crypto by utilizing profit targets as part of your crypto profit-taking strategy also makes it possible to tell whether or not a trade will be worth taking. If the risk is greater than, equal to, or even not considerably less than the profit potential, then the trade isn't worth taking — and you should wait or move on to the next opportunity. In this way, determining a profit target can actually help you filter out poor trades.

Many traders use technical analysis to identify entry and exit points in order to maximize profit and minimize risk. While there are hundreds of technical indicators, chart patterns and tools you can use to analyze crypto charts and zero in on key entry and exit points, there are a few strategies in particular worth considering.

• Paying attention to areas of support and resistance

Anyone wondering how to take crypto profits who’s interested in regularly taking profits in crypto should master these three strategies.

, should be a part of any crypto profit-taking strategy. When looking at the price chart of any crypto in almost any time frame, you'll notice certain areas where upward momentum seems to halt. These are known as resistance areas. Conversely, you'll also see certain areas where downward momentum is stopped or reversed. These are known as areas of support.

Both areas are key. Whether you have an open buy order or sell order, keep your eye on these key areas and consider exiting the trade and taking profits in crypto whenever the price nears. While the price will break through either support or resistance if the momentum or trend is strong enough, more often than not crypto prices will react and bounce off of these areas in the opposite direction.

 are equally important when learning how to take crypto profits. Why? Well, the crypto market naturally tends to push prices toward the various Fibonacci levels. By paying attention to these levels — especially retracements — and checking them as a part of your crypto profit-taking strategy, you'll gain the upper hand when it comes to taking profits in crypto.

When learning how to take crypto profits, understanding pivot points is also a must. Similar to Fibonacci and support and resistance levels, it's quite common to see price react to pivot points.

Pivot points are calculated to determine specific points where market sentiment shifts from bullish to bearish. Day traders, in particular, use pivot points for determining entry points, stops, and levels for taking profits in crypto.

At the end of the day, pivot points should be viewed as intraday technical indicators. Due to their ability to identify trends and reversals, calculating pivot points is a must when learning how to take crypto profits for maximum gain.

Regardless of the crypto profit-taking strategy used, taking profits in crypto largely depends on one's risk appetite and investment timeline. If you have years to wait before seeing a return on your Bitcoin or other crypto investment — and the nerves of steel needed to wait out huge market dips and price corrections — then HODLing may be the right crypto profit-taking strategy for you.

If you're like most people, however, you want to see some profits and a return on your investment as soon as possible. You don't want to wait till years down the road; you want your venture into crypto to pay out right away, again and again. Chances are you also don't have the stomach for large downswings and seeing your account in the red. If this sounds like you, taking profits in crypto is definitely the right move.

Sure, taking profits in crypto takes practice and some time spent learning when and how to take them. However, by investing a little time into learning how to execute the right crypto profit-taking strategy, you can multiply your potential gains, allowing you to grow your crypto portfolio much faster and begin enjoying the fruits of your labor.

Reinvesting the Profits You Take in Crypto

After taking profits, many crypto investors choose to keep a portion of those profits, and reinvest the rest back in the crypto they just sold. They do this by selling high when the price begins to stall and consolidate, and then they wait for it to rebound off of a pivot point, support level or Fibonacci level before placing another buy order.

By actively trading and reinvesting your profits in this fashion, you can earn substantially more than you could by simply buying and HODLing for years, months, and even weeks or days. However, doing so and becoming consistently profitable takes fundamental knowledge of the markets, the right crypto profit-taking strategy, and the ability to stick to the strategy or adapt to market conditions as needed.

Another option is to employ strategies that allow you to build up your portfolio of principal coins, while investing in other ICOs and innovative coin projects. By going this route, you aren't just transferring Bitcoin into dollars and into your bank account for spending. Instead, you're reinvesting it into newer coin projects and technology with much more upside potential.

For example, if you traded 0.10 Bitcoin (BTC) and converted it into 0.20 BTC, you could reinvest the 0.10 BTC you earned as profit into a new type of coin or ICO — perhaps with the potential to provide a 50x or 100x return. If your gambit is successful, you would be an early investor who’s able to reap substantial rewards.

This crypto reinvesting strategy is ideal for investors looking to build their portfolios with a variety of high-return coins without taking too much risk. Both of the above strategies, however, offer amazing return potential and solid protection from future losses. Each also allows you to gain from the volatility of crypto, and from the nearly constant emergence of new coins and crypto technology and services.

As you can see from the examples above, as well as from thousands of crypto success stories, the right trading strategies can help you make money with digital currencies time and again. However, before you even begin thinking about taking profits in crypto, you must get used to recognizing certain cryptocurrency signals or "tells" in order to know when to buy and when to bail. The more experience you gain and the more you learn about how these unique assets work, the more profits you can expect to take.

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Crypto Take-Profit Strategy: When and How to Take Profits

Fearful of price weakness and bearish sentiments? Make sure you spot the upcoming bearish reversal with the Bitcoin death cross pattern.

 and other cryptocurrencies as long-term assets to buy and hold with the expectation of appreciation over time. Others take a more active approach, and regularly buy and sell cryptos by studying the charts, reading the markets, and identifying telltale signs of reversals in price momentum and profit opportunities.

The Bitcoin death cross is a chart pattern formed whenever the 50-day moving average crosses over and below the 200-day moving average, signaling a long-term downward swing in price momentum.

Bitcoin’s 50-day moving average is nearing its 200-day moving average and is now at its closest point since 2015. A crossing of the two lines would signal fresh weakness and a move technical traders have dubbed the crypto “death cross.” If you’re wondering about a crypto crash, along with many other current traders and investors, a Bitcoin death cross may provide the answer.

The Bitcoin death cross pattern is formed using the 50-day and 200-day MAs, and with these longer time frames the MA lines are affected less by short-term price movements, and more by long-term sentiment. In other words, they tell you what the general tone of the Bitcoin market is. Of course, these MAs and the death cross pattern can be used for other cryptos as well.

The 200-day MA is plotted according to a much longer time frame than the 50-day MA. This means the 200-day MA tracks short-term prices less closely than the 50-day MA. So when the 50-day line crosses below it to the downside, it indicates short-term momentum is declining against the last 200 days. In many cases, this translates into a reversal of the long-term price trend. The crossing and growing divergence of these two MA lines is known as the Bitcoin or crypto death cross.

While this chart pattern can signal trouble for long-term Bitcoin (and other) crypto investors, others often see it as an opportunity to profit from the shift in momentum — or to bring out their “inner Warren Buffett” by buying low and acquiring the asset at a discount. As he once famously said, “When there’s blood in the streets – buy.”

You already know that a death cross occurs when the 50-day MA crosses below the 200-day MA. However, death crosses form in three stages, and understanding these stages will help you not only spot a Bitcoin death cross when it occurs, but prepare for it by anticipating it — and ride it out until momentum shifts back into buy territory.

The three main stages of a crypto death cross include:

Altcoins

Blockchain

Crypto

DeFi

GameFi

Indicators

Investing

Metaverse

Memes

Options

Stablecoin

Staking

Strategies

Trading

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