How to Build a Crypto Exit Plan Before the Next Bull Run (2026)

The numbers are brutal: research consistently shows that around 95% of crypto traders lose money. Not because they picked the wrong coins or entered at the wrong time, but because they never had a plan for when to sell. During the 2021 bull run, Bitcoin climbed from $29,000 in July to $69,000 by November. Countless investors watched their portfolios hit life-changing numbers, convinced the rally would continue. Then came the 78% crash that wiped out over $2 trillion in market value. The gains evaporated, and those same investors were left holding bags, wondering why they didn’t sell when they had the chance.

The answer is simple: they didn’t have an exit plan. And without one, you’re gambling, not investing.

Why Most Investors Fail to Take Profits

Understanding why people fail to exit is the first step toward not repeating their mistakes. The psychology working against you is powerful and well-documented.

The Endowment Effect makes you value what you own more than its actual worth. Classic behavioral economics research by Kahneman, Knetsch, and Thaler found people value items they own approximately twice as high as equivalent items they don’t own. This bias is amplified in crypto, where emotional attachment to “your coins” runs deep. Selling feels like giving away something precious, even when the rational move is to lock in gains.

Loss Aversion plays tricks on your brain when prices are rising. If Bitcoin is at $100,000 and analysts predict $150,000, selling at $100,000 feels like “losing” $50,000, even though you’d be securing real profits. This cognitive distortion kept thousands of investors from selling during 2021’s peak because they were convinced $100,000 was imminent.

FOMO and Social Pressure compound the problem. Crypto communities have built entire cultures around “HODL” mentality. During Verge coin’s massive run in 2017-2018, traders were actively discouraged from selling on social media. Even as the coin collapsed over 90% from its peak, community members felt obligated to keep the faith rather than secure profits. Research published in the Journal of Behavioral Addictions found that crypto traders are particularly susceptible to social media influence and testimonials that encourage holding through gains.

The 24/7 Market creates constant monitoring opportunities that feed anxiety and impulsive decisions. Unlike traditional markets with opening and closing bells, crypto never stops. This leads to obsessive chart-watching and emotional exhaustion that clouds judgment at critical moments.

The solution to all of this? Remove emotion from the equation by building your exit plan now, before prices start moving and your brain starts rationalizing why you should wait just a little longer.

What an Exit Plan Actually Contains

A functional exit plan isn’t just “sell when it goes up.” It requires specific, written components that you can execute without making real-time decisions under pressure.

Price Targets with Percentages: Define exactly what price levels trigger sells and what percentage of your holdings you’ll sell at each level. For example: sell 15% at $80,000 BTC, 20% at $100,000, 25% at $120,000, 25% at $150,000 and keep 15% as a “moon bag” for extreme upside.

Time-Based Triggers: Some investors set calendar-based exits regardless of price. If you’re 18 months past the Bitcoin halving (historically when cycles peak), you might start taking profits even if prices haven’t hit your targets. The April 2024 halving puts this window roughly in late 2025.

Life Goal Alignment: Tie your exits to actual life improvements, not arbitrary numbers. “Enough to pay off my car loan” is more concrete than “when I feel like I’ve made enough.” When your portfolio hits that goal, you take profits. Period.

Tax Considerations: Your exit plan should account for capital gains implications. Taking profits strategically across tax years, or understanding the difference between short-term and long-term capital gains rates, can significantly impact your actual take-home amount.

Rebalancing Rules: Define what you’ll do with profits. Convert to stablecoins? Move to fiat? Reinvest during the next bear market? Having this predetermined prevents you from FOMO-ing back into positions you just exited.

Building Your Exit Plan: A Step-by-Step Approach

Start this process when you’re calm and the market is quiet. Never build an exit plan during a rally when emotions are high.

Step 1: Define Your Investment Purpose

Why did you buy crypto in the first place? Be specific. “To make money” isn’t a purpose. “To fund a house down payment in 3-5 years” or “to supplement retirement savings” gives you concrete targets to plan around. Write it down. This purpose becomes your anchor when greed whispers that you should hold just a little longer.

Step 2: Calculate Your Magic Numbers

What portfolio value would meaningfully change your life? For some, that’s $50,000. For others, it’s $500,000. Whatever the number, work backward from there. If your portfolio needs to 5x to reach that goal, what prices correspond to 2x, 3x, and 4x? These become your milestone targets.

Step 3: Set Tiered Exit Points

Never plan to sell everything at once. Psychology makes all-or-nothing decisions nearly impossible to execute. Instead, structure exits around milestones:

• At 2x gains: Sell 20-25% to recover your initial investment plus some profit

• At 3-4x gains: Sell another 25-30%

• At 5x+ gains: Sell another 25-30%

• Keep 15-25% as a “moon bag” for potential blow-off tops

This approach helps ensure you secure some profits while maintaining upside exposure. If prices crash after your first exit, you’ve already locked in gains. If they continue rising, you’re still participating.

Step 4: Choose Your Exit Method

You have options for executing exits:

Limit orders let you set sell orders in advance on exchanges. When prices hit your target, the order executes automatically. The downside is that these orders are visible on order books and can be canceled during moments of weakness.

DCA out (dollar-cost averaging out) involves selling fixed amounts at regular intervals during a bull run, regardless of price. This removes timing pressure entirely.

Alert-based exits rely on price notifications to prompt manual sells. Tools like Merlin specialize in exit planning, sending alerts when prices approach your predetermined targets and tracking your cost basis across wallets. This keeps your plan front-of-mind without requiring constant chart monitoring.

Step 5: Document Everything

Write your plan down. Include your targets, percentages, the reasoning behind each decision, and what you’ll do with proceeds. This document becomes your reference when your brain starts negotiating with itself at critical moments. Some investors even sign and date their plans as a psychological commitment device.

Learning from Historical Cycles

Bitcoin’s price history offers patterns worth understanding when setting targets.

After the 2012 halving, Bitcoin peaked roughly 12 months later. After 2016, the peak came about 17 months post-halving. After 2020, the peak arrived approximately 18 months later in November 2021. These aren’t guarantees, but they suggest a rough window of 12-18 months post-halving for peak prices.

The 2017 bull run saw six corrections of 30-40% before reaching its $20,000 peak. The 2021 rally included seven pullbacks of 20% or more before the April local high at $64,000. Bull markets aren’t straight lines up. These corrections shake out inexperienced investors and are often followed by continuation higher. Having an exit plan prevents panic-selling during healthy pullbacks.

Both the 2018 and 2022 bear markets crashed approximately 78-80% from their peaks. If history rhymes, even a “conservative” 50% crash from future highs should be expected. This makes taking profits at intermediate targets critical rather than waiting for the absolute top that nobody can predict.

Recognizing Warning Signs

While nobody can time the exact top, certain signals have historically preceded major reversals:

Extreme Greed Indicators: The Fear and Greed Index hitting “Extreme Greed” (80+) for extended periods often signals overheated conditions. In late 2021, the index reached these levels weeks before the crash. This doesn’t mean sell immediately, but it suggests accelerating your exit timeline rather than waiting for higher targets.

Declining Volume on Rising Prices: When prices keep climbing but trading volume decreases, it often signals weakening momentum. The April 2021 Bitcoin peak showed this divergence before the 55% correction that followed.

Media Saturation: When your non-crypto friends start asking about Bitcoin, when celebrities are promoting coins, when mainstream news runs “Should you buy Bitcoin?” segments daily, the market is likely approaching a local top. These were clear signals in both 2017 and 2021.

Leverage Explosion: During late-stage bull runs, leveraged positions spike dramatically. Billions in liquidations during single-day corrections signal the market is overextended. When you see headlines about $500M+ in liquidations happening in hours, that’s a warning sign.

None of these indicators are precise timing tools. But when multiple signals align, it’s time to execute your exit plan rather than wait for perfection.

A Worked Example

Let’s make this concrete. Imagine you hold 1 BTC purchased at an average cost of $45,000, and your goal is to secure enough profit to pay off a $50,000 car loan.

Your Exit Plan:

Your break-even plus goal achievement requires approximately $95,000 per BTC. But rather than waiting for that exact number and risking a crash before you reach it, you structure tiered exits:

At $80,000 (78% gain): Sell 0.25 BTC for $20,000. You’ve now recovered nearly half your initial investment and have cash regardless of what happens next.

At $100,000 (122% gain): Sell another 0.25 BTC for $25,000. Combined with your first exit, you now have $45,000, nearly recovering your entire initial investment.

At $120,000 (167% gain): Sell 0.25 BTC for $30,000. Total cash: $75,000. Your car loan is paid, and you have $25,000 extra.

Keep 0.25 BTC as a moon bag for extreme upside scenarios.

If Bitcoin crashes 50% after your second exit (from $100,000 to $50,000), you’ve still secured $45,000 and hold 0.5 BTC worth $25,000. Total value: $70,000. Compare this to someone who held everything waiting for $150,000, who now has 1 BTC worth $50,000 and zero cash.

The disciplined approach wins in both the “it kept going up” and “it crashed” scenarios, because you’ve systematically reduced risk while capturing gains.

Common Exit Plan Mistakes

Setting Targets Too High: If you’re waiting for Bitcoin at $500,000 while it’s trading at $100,000, you might be planning for a scenario that never arrives. Set realistic targets based on historical patterns, not viral predictions from anonymous Twitter accounts.

Ignoring Tax Implications: A 200% gain taxed at 30% still leaves you with 140% net profit. Don’t let tax avoidance prevent profitable selling. Factor taxes into your plan, but don’t let them paralyze decision-making.

Overcomplicating the Plan: If your crypto exit strategy requires a spreadsheet with 47 scenarios and constant adjustment, you won’t follow it. Simple plans get executed. Complex plans get abandoned.

Not Having the Plan Accessible: When prices spike 30% overnight, you need to know your targets instantly. Store your exit plan somewhere you can access it quickly, whether that’s a notes app, a portfolio tracker, or a printed document by your computer.

Moving the Goalposts: The most dangerous mistake is changing your targets mid-rally. You set $100,000 as your exit. It arrives. You think: “Well, maybe $120,000.” It arrives. “Maybe $150,000...” This is how gains evaporate. The plan you made when calm is smarter than the plan you’re improvising while watching green candles.

Preparing for the Cycle Ahead

The next 12-18 months could see significant price movement if historical patterns hold. Whether Bitcoin reaches the predictions of $150,000, $200,000, or beyond is unknowable. What is knowable is that people without exit plans will repeat the same mistakes of every previous cycle: watching life-changing gains turn into devastating losses because they couldn’t bring themselves to sell.

The best exit plans are built before you need them. Set your targets based on life goals, not greed. Use tiered exits to lock in gains while maintaining upside. Automate or systematize your process to remove real-time emotional decisions — whether through exchange limit orders, portfolio trackers with alert features, or simply a written plan you review weekly.

The bull market will test you. Prices will hit your first target, and you’ll want to wait for more. Social media will flood with predictions of higher highs. Your friends will brag about not selling. Remember: the 95% who lose money felt exactly the same way before they lost.

The 5% who consistently profit have one thing in common: they had a plan, and they followed it.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research and consider consulting a financial advisor before making investment decisions.