How to Create a Smart Exit Strategy in Crypto

Let’s be honest—many of us have been in the crypto space for a while, yet still haven’t nailed down a solid exit strategy. It’s easy to get swept up in the thrill of bull markets, but without a proper plan to cash out, you’re risking everything you've worked hard to earn.

Growth in your portfolio means little if you don’t actually realise those gains. So how exactly do you go about building a sensible exit plan?

1. Set a Clear Selling Target

One of the biggest mistakes crypto investors make is assuming prices will keep going up forever. While it’s true that major catalysts like institutional adoption and nation-state interest can fuel bullish momentum, markets are still cyclical—especially crypto.

Look at Bitcoin’s history. Every four years, we typically see a peak around 500 days after a halving event. This pattern has repeated multiple times, and ignoring it could mean riding your gains all the way back down. Having a clear target, such as “I’ll start taking profits when BTC hits $120,000,” gives you a rulebook for when emotions run high.

2. Take Partial Profits to Lock in Gains

The future is unpredictable. So why wait for a top that may never come? A good habit is to take some chips off the table along the way. A strategy like the "Moonbag Method"—where you sell 50% of your position once it doubles—allows you to de-risk while keeping skin in the game.

That way, even if the asset goes to the moon, you still benefit. But if the market turns, at least you've walked away with real, bankable gains. Don’t be that person who had $500,000 in unrealised profits only to watch it crumble to $50,000 because they “believed in the project.”

3. Reduce Altcoin Exposure Near the Cycle Peak

Holding altcoins indefinitely is a recipe for disaster if you don’t have a plan. While altcoins can pump hard during bull runs, they also crash harder when the music stops.

That’s why, as we approach the later stages of a cycle, it’s wise to gradually trim your altcoin positions. Focus on high-conviction assets and don’t overexpose yourself to low-liquidity tokens. Remember, altcoins are often the first to fall—and the last to recover—when the market enters a downturn.

4. Get Your Tax Planning Sorted Early

This one’s often overlooked but massively important. Once you’ve realised your gains, you’re likely going to owe taxes—especially in Australia where the ATO keeps a close eye on crypto activity. If you don’t prepare in advance, you might end up with a nasty tax bill (and no liquidity left to pay it).

Talk to a financial advisor or crypto tax professional who understands your jurisdiction. Understand your capital gains obligations, and if possible, structure your exits in a way that minimises tax impact—like spreading profits across financial years or harvesting losses to offset gains.

Bonus Tips for a Stress-Free Exit

• Write it down: Having a written exit plan removes emotional decision-making from the equation.

• Stay flexible: Market conditions change. Don’t be afraid to adjust your plan if new macro factors arise.

• Don’t just screenshot, take profits: A screenshot of a green portfolio won’t pay your bills.

Final Thoughts

If this market has taught us anything, it's that waiting too long to exit can cost you everything. A proper exit strategy doesn’t make you less of a believer in crypto—it makes you smarter. Whether you’re an altcoin degen, a long-term HODLer, or somewhere in between, your future self will thank you for planning ahead.

So ask yourself: if the market dropped 60% tomorrow, would you be okay? If the answer is “no” or even “maybe,” it’s time to sort out your exit plan today.

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