DCA Out: The Smartest Way to Take Profits in a Bull Market

The mirror image of dollar-cost averaging that locks in gains before the market turns

Everyone in crypto knows about dollar-cost averaging in, the disciplined strategy of buying a fixed amount at regular intervals regardless of price. But far fewer investors have a plan for the other side of the equation: systematically selling on the way up. This is where DCA-out comes in, and it is arguably the more important skill because failing to take profits is what turns life-changing gains into painful regrets.

DCA-out, also called scaling out or reverse DCA, is the practice of selling predetermined portions of your holdings at regular intervals or price targets during a bull market. Instead of trying to call the exact top and dump everything at once, you lock in profits gradually as prices rise. This guide walks you through exactly how to set up a DCA-out plan, with concrete dollar examples showing how this strategy would have saved investors thousands during the 2021 bull run compared to simply holding through the crash.

What You'll Need

• An existing crypto portfolio with unrealized gains you want to protect
• A verified account on a major exchange like Binance, Coinbase, or Kraken
• A basic understanding of limit orders and how to place them on your exchange
• A spreadsheet or portfolio tracker to plan and log your exit schedule

Step-by-Step Guide

Step 1

Understand What DCA-Out Is and Why It Works

DCA-out is the exact mirror of dollar-cost averaging in. Where DCA-in has you buying a fixed dollar amount on a regular schedule regardless of price, DCA-out has you selling a fixed percentage or dollar amount of your holdings on a regular schedule or at predetermined price levels as the market rises. The core principle is the same: remove emotion from the equation and replace gut feelings with a repeatable system.

The reason DCA-out works so well is that nobody can consistently call market tops. Bitcoin peaked at $64,000 in April 2021, crashed to $30,000, rallied back to $69,000 in November, and then collapsed to $15,500 over the next year. Investors who were waiting for $100,000 to sell ended up holding through an 80% drawdown. Those who systematically sold portions on the way up locked in profits at $45,000, $55,000, $65,000, and beyond, ending up with far more capital than those who tried to time the perfect exit.

Step 2

Decide Your DCA-Out Method: Time-Based or Price-Based

There are two main approaches to DCA-out. Time-based DCA-out involves selling a fixed percentage of your remaining holdings at regular intervals, such as every week or every two weeks, once you decide the bull market is mature. Price-based DCA-out involves setting sell orders at specific price targets and selling a portion each time one of those targets is hit. Many successful investors use a hybrid of both.

Time-based works well if you want pure simplicity. For example, you might decide to sell 5% of your Bitcoin holdings every Monday for 20 weeks starting when Bitcoin crosses its previous all-time high. Price-based works better if you have specific technical or fundamental targets. For instance, you might sell 10% at $80,000, another 10% at $95,000, another 15% at $110,000, and so on up to your maximum expected price. The hybrid approach sells on a time schedule but accelerates sales when the price hits key milestones.

Step 3

Calculate Your Exit Schedule with Real Numbers

Let us walk through a concrete example. Suppose you hold 1.0 BTC that you accumulated at an average cost of $35,000. Your total investment is $35,000. You believe the bull market could take Bitcoin to somewhere between $100,000 and $150,000, but you are not sure where the top will be. You want to recover your initial investment and then let the rest ride with reduced risk.

Here is a sample price-based DCA-out plan: sell 0.10 BTC at $70,000 (receive $7,000), sell 0.10 BTC at $80,000 ($8,000), sell 0.10 BTC at $90,000 ($9,000), sell 0.10 BTC at $100,000 ($10,000), and sell 0.10 BTC at $110,000 ($11,000). After these five sales, you have cashed out 0.50 BTC for a total of $45,000, which is $10,000 more than your entire initial investment. You still hold 0.50 BTC which is pure profit, a position you can hold with zero stress regardless of what the market does next. If Bitcoin goes to $150,000, your remaining 0.50 BTC is worth $75,000. If it crashes back to $30,000, you already secured $45,000 in realized gains.

Step 4

Set Up Your Sell Orders on the Exchange

Once you have your exit schedule planned, it is time to place the actual orders. On Binance, navigate to the spot trading interface for BTC/USDT, select Limit Order, enter your sell price and the amount of BTC you want to sell at that level, and click Sell. Repeat this for each price target in your plan. On Coinbase Advanced, the process is similar through their limit order interface. On Kraken, use the Create Order form with the Limit option.

Place all your sell orders in advance so they are sitting on the order book waiting to execute automatically. This is critical because it removes the temptation to cancel or move your targets when euphoria is peaking and everyone on social media is calling for higher prices. The whole point of DCA-out is that your plan was made with a clear head, not in the heat of a parabolic rally. If your exchange supports Good Till Cancelled orders, use that setting so your orders remain active indefinitely until filled.

Step 5

Use the 2021 Bull Market as Your Cautionary Tale

Let us compare two investors who each held 1.0 BTC at the start of 2021 with an average cost basis of $20,000. Investor A, the holder, decided to wait for $100,000 and never sold. Bitcoin hit $64,000 in April, crashed to $30,000, bounced to $69,000 in November, then spent all of 2022 collapsing to $15,500. By the bottom, Investor A was sitting on a $4,500 loss and had realized zero dollars in profit despite watching their portfolio peak at $69,000.

Investor B used a DCA-out strategy and sold 0.15 BTC at $40,000 ($6,000), 0.15 BTC at $50,000 ($7,500), 0.15 BTC at $60,000 ($9,000), and 0.10 BTC at $65,000 ($6,500). Total cash realized: $29,000 on a $20,000 investment, a $9,000 profit banked in stablecoins. Investor B still held 0.45 BTC through the crash. Even at the $15,500 bottom, their remaining BTC was worth about $6,975 plus the $29,000 in cash, totaling roughly $35,975. That is a $15,975 net profit compared to Investor A who was underwater. The math speaks for itself.

Step 6

Manage Your Cash After Selling

What you do with the proceeds from your DCA-out matters almost as much as the selling itself. Many investors convert their profits to stablecoins like USDC or USDT and earn yield on them through lending platforms or exchange earn programs while they wait. Others transfer profits directly to their bank account, removing the temptation to reinvest too soon during the late stages of a bull market.

A popular approach is the 50/30/20 rule for DCA-out proceeds: move 50% to a stablecoin earning yield, withdraw 30% to your bank account as locked-in life-changing money that you will not touch, and keep 20% liquid on the exchange for potential re-entry if there is a significant dip. This ensures you enjoy some of your profits today, protect the bulk from emotional re-entry, and still have dry powder for opportunities. Whatever your approach, decide the plan before the profits start flowing in.

Step 7

Adjust Your Plan as the Cycle Evolves

While the core strength of DCA-out is sticking to your plan, there are situations where minor adjustments make sense. If the market rallies faster and more aggressively than expected with extreme euphoria indicators like the Fear and Greed Index sitting above 90 for weeks, you might accelerate your remaining sales slightly. If the market stalls and consolidates at a level below your next target for an extended period, you might consider selling a small portion at the current price rather than waiting.

The key word here is minor adjustments, not wholesale plan changes. If your plan says sell 10% at $100,000 and Bitcoin is at $98,500 consolidating with bearish divergences on the RSI, selling that tranche at $98,500 is a reasonable adjustment. What is not reasonable is scrapping your entire plan at $85,000 because someone on social media convinced you Bitcoin is going to $250,000. Review your plan monthly, make small tweaks if the data justifies it, and otherwise let the system work.

Step 8

Prepare to Re-Enter with DCA-In After the Cycle

The beauty of combining DCA-out during bull markets with DCA-in during bear markets is that it creates a complete cycle strategy. After you have taken profits and the market eventually enters a bear phase with prices 50% to 80% below the peak, you begin DCA-in again with the profits you secured. This is how experienced crypto investors grow their positions cycle over cycle rather than riding the roller coaster back to where they started.

Set rules in advance for when you will start DCA-in again. A common approach is to begin buying when the price is 60% or more below the all-time high and the Fear and Greed Index has been in Extreme Fear territory for at least two consecutive weeks. Using our earlier example, if Investor B starts DCA-in with their $29,000 cash when Bitcoin drops to $20,000, they could accumulate 1.45 BTC, significantly more than the 1.0 BTC they started the previous cycle with. That is the compounding power of systematic profit-taking.

Tips & Best Practices

• Start your DCA-out plan before the bull market enters its euphoric phase. Set your schedule and place your orders while you can still think clearly without the influence of peak greed.
• Never sell your entire position. Keep at least 20% to 30% as a moon bag that you hold through the cycle in case the market goes far beyond your targets. You want to participate in unexpected upside while still protecting the majority of your gains.
• Use a spreadsheet to track every sale including the date, price, amount sold, proceeds received, and your remaining position size. This creates accountability and gives you valuable data for planning your next cycle exit strategy.
• Consider your tax situation before executing your DCA-out plan. In many jurisdictions, each sale is a taxable event. Spreading sales across two tax years or holding for over a year to qualify for long-term capital gains rates can significantly reduce your tax burden.
• Avoid checking the price obsessively after selling a tranche. If you sold at $90,000 and the price goes to $95,000 the next day, that is not a mistake. It is the system working. Regret over sold tranches is the biggest psychological threat to a DCA-out plan.

Important: DCA-out means you will almost certainly sell some of your holdings below the eventual top, and that is by design. If Bitcoin peaks at $120,000 and you sold portions at $70,000, $80,000, and $90,000, those sales were still profitable and still protected you from the inevitable crash. Do not compare your realized gains to a hypothetical perfect top sale. No one sells the exact top, and investors who try usually end up selling the bottom instead.

Frequently Asked Questions

How do I know when to start DCA-out in a bull market?

A common trigger is when the asset surpasses its previous all-time high, which typically signals the euphoric phase of a bull cycle. Other signals include the Fear and Greed Index consistently above 75, your portfolio being up 100% or more from your cost basis, and mainstream media running frequent crypto headlines. You do not need to start selling aggressively, even beginning with 5% tranches puts the system in motion.

What percentage of my holdings should I sell with each DCA-out tranche?

Most DCA-out strategies sell between 5% and 15% of the original position per tranche, spread across 6 to 12 price targets or time intervals. A conservative approach might sell 5% per target across 12 levels, exiting 60% total. An aggressive approach might sell 10% to 15% per target across 6 levels, exiting 60% to 90%. Keep at least 10% to 30% as a long-term hold regardless.

Should I DCA-out of altcoins differently than Bitcoin?

Yes. Altcoins are significantly more volatile and historically lose 90% to 99% of their value in bear markets compared to Bitcoin which typically loses 70% to 85%. For altcoins, start your DCA-out earlier in the cycle, sell larger percentages per tranche, and consider exiting 80% to 90% of altcoin positions by the time the market feels euphoric. Many altcoins from previous cycles never recover to their all-time highs.

CryptoTakeProfit Research Team

Our team of analysts and traders covers the crypto market daily. We combine on-chain data, technical analysis, and fundamental research to bring you actionable insights.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always do your own research and never invest more than you can afford to lose. This article may contain affiliate links.