The crypto market is buzzing and it is the alt coins making most of the noise. The high is laced with the double digit gains and outperforming Bitcoin on the chart. Assets like Solana, Avalanche, XRP are all keeping the season alive letting investors riding high on gains. But all good things do come to an end, and we all know this season too is not going to last for ever.
It is extremely important for an investor to know when to enter, at the same time it is far more important to understand when to exit. Booking profit is an art and everyone should learn it before it is too late. Although ‘timing’ tops this list and it is nearly impossible to read the sentiments around it. Yet, here are four reliable signals that can help investors decide when to lock the profit before it is too late.
Overheated technical indicators (RSI > 75)
How do we know when the market is overheated? It is simple, whenever assets start flashing a RSI above 75 or 80. RSI is a moment indicator to measure how overbought or over sold an asset is. 
A lot of coins are hitting extreme RSI levels indicating peak buying pressure. This is the time to keep an eye over your asset. For peak buying can mean quick selling too. The best way to monitor this is by considering tighter stop losses. This will help in protecting unrealised gains
Volume spikes without fundamentals
If you see sharp price increases on high volume and no major news and upgrades, then it may be driven by hype and not substance. There is a common trend in crypto ‘buy the rumor, sell the rally’. A lot of lesser known tokens see major pumps and drive the rally all thanks to influencer hype and market sentiments rather than any fundamental changes. The best way to monitor this is by being cautious. If your favorite token is pumping without any sustainable news and real world utility, consider taking profit and exiting while the market is high.
Altcoin dominance hits a local peak
One should always keep a lookout on the altcoin dominance ratio that is the share of total market cap held by non-Bitcoin assets. This is a solid macro indicator of capital rotation.
Altcoin dominance reaching a multi-month high, often signals market saturation. Analysing the current scenario, Altcoin dominance has touched almost 57%, which is the highest in the last two years. This can be a signal that money will now start rotating back to Bitcoin or stablecoins.
Retail FOMO and viral hype surge
It is usually seen in the later stages of the rally that a lot of Google searches, media coverage and social media buzz bring in new investors to the market. The best way to track it is by being updated on social media and keeping an eye on what is the most searched phrase. If it is around the lines of ‘best altcoin to buy now’ or ‘next 100x altcoin’ then it’s the cycle where we must exit. This phase promises momentum but at the cost of great volatility. Its always better to take profit and avoid late stage trends.
Conclusion: Lock in gains, don’t chase tops
Altcoin season can be greatly rewarding only to those who know how to reap it right. It is always important to manage the risk while trading for profit is real only when it is booked. There is nothing like a perfect top. For it may end up by missed opportunities or in many cases, riding the drop down. Creating an exit plan can protect your capital while providing great returns.
FAQ
Q: Should I sell all my altcoins when RSI is high?
RSI can be one indicator out of many. Regular booking of partial profits and using stop-losses can help in protecting the gains.
Q: What if I believe in the project long term?
Diversifying your strategies can help you reduce risks. You can book short-term profits and re-enter on a dip.
Q: How do I track altcoin dominance?
There are multiple online platforms that may help you to check these. Platforms like TradingView or CoinMarketCap offer real-time analytic and charting tools to monitor the metrics. Keep yourself updated and upgraded on them.
Q: Is this the end of the altseason?
It is still too early to predict but we can see topping signs already. It’s best to stay alert as the market may be in a cautious phase.
