Here’s When to Consider Selling Your Bitcoin, According to CryptoQuant

As bitcoin (BTC) remains in its parabolic phase, the leading cryptocurrency continues to record new highs. A few hours ago, it smashed another milestone, reaching a new all-time high of $94,040. This rally has raised concerns about selling for profit or continuing to hold among market participants.

An on-chain analysis by market intelligence platform CryptoQuant has outlined some metrics to monitor, offering insights that could guide investors in deciding whether to sell BTC or continue to hold.

Time to sell or hold?

According to CryptoQuant analysts, metrics like Market Value to Realized Value (MVRV) and the Crypto Fear & Greed Index can time BTC’s top to indicate when to sell.

Bitcoin MVRV ratio. Source: CryptoQuant

Realized price bands represent the average cost basis of all BTC investors, while the MVRV ratio shows the ratio of profit or loss in the Bitcoin market and they work together. Historically, an MVRV ratio above 3.7 has signaled long-term market highs, a strong signal to sell. A high MVRV ratio shows significant unrealized profit among BTC investors and market participants are likely to realize the gains soon.

The MVRV ratio is currently around 2.5, indicating that although there are substantial unrealized profits in the market, BTC has not yet peaked.

Market sentiment among long-term holders

The Crypto Fear and Greed Index determines market sentiment by analyzing various factors, including volatility and social media trends. Greedy sentiment suggests proceeding with caution, while fear suggests going all out. The index is now at 83, and BTC continues to rise, suggesting that investors are extremely greedy and a top is near.

When BTC breaks through, long-term holders will start selling, pushing the Coin Days Destroyed (CDD) metric above 15-20 million. CDD measures Bitcoin age destruction by multiplying the number of coins moved by the number of days the assets were dormant. This metric often increases when long-term holders activate large amounts of dormant assets.

Fear and greed. Source: CryptoQuant Bitcoin Realized Cap Growth

Also, investors can know when it’s time to sell BTC by tracking the growth of bitcoin’s realized capitalization. This indicator indicates when new money enters the market, which is necessary for sustained price increases. Low realized cap growth suggests insufficient new money flow, indicating that the price of BTC is about to come under pressure.

Additionally, a decrease in the Inter-Exchange Flow Pulse (IFP), which means less BTC is moving from derivatives exchanges, could be a sign that the asset has outperformed; therefore, a bearish IFP suggests that it is time to sell BTC.

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