Help thread for those who are thinking about when to sell:

- Nobody really knows where the top is
- Those who draw lines on charts are generally clueless, don't trust them
- Contemplate not selling, why do you want to sell? You will most likely lose money if you try to trade

Ok, but if you hold a gun to my head and I must give a guess?

If I really had to try to guess where the top is, here's what I would do. First of all, it wouldn't be a number that I'd write down on beforehand and follow that. I'd have to monitor the situation every day.

What I'd look for is the level of "frothiness" in the market. What does frothiness mean? See the Investopedia definition, it nails it:

Why this is important is because bitcoin can reach $100,000 in different ways. It could reach it and be extremely frothy or it could reach it and be extremely unfrothy. And while froth is more common when markets move up fast, markets can even move up fast without being frothy.

So, we've established that a price level is no good indicator for when to sell (atleast not in my book). So how do we detect froth?

First, let me give a counterexample. Let's say retail traders completely stopped caring about bitcoin.

Let's say Coinbase had no outages, Binance had no new user sign-ups, traffic was low, no one was saying anything in the media, there were no football players or TV personalities talking about bitcoin.

The price of bitcoin could still rise, with 0 froth.

"Because of stock-to-flow, right?"

No, you spectacular moron, not because of stock-to-flow. Stock-to-flow is as useful for picking market tops as the Rainbow chart is.

It could go up because HNWIs, family offices, funds etc are unceremoniously building out bitcoin positions.

Now, I don't think that's how it'll happen. Bitcoin is inherently prone to froth. The media loves writing about it, retail investors love to speculate in it. It'd be somewhat of a miracle if institutions could just slowly bid up the price over years without anyone noticing.

And yes, there's this adage about "when the shoeshine boy" or "the taxi driver" starts talking about it it's the top, and that's kind of exactly how it is. Markets are frothy when people who have no clue what they're doing are buying just to jump on the train.

So, today, bitcoin's market cap is starting to approach 8% of gold. To me that is pretty impressive for bitcoin, but not outrageous. If it reached 200% of gold in a short time frame, that'd be outrageous. But I think we'd see frothiness much before that point.

Markers are frothy when they're driven by people who are not thinking about the price in the way I just did. Froth is when people are just throwing money at bitcoin because they don't want to miss out, because they think it'll double next week.

The institutions that buy now make calculated decisions. They have long time horizons. They won't be scared if bitcoin dips -45%. It's rather people who are just taking a chance with bitcoin that are the danger, because they can and will sell as soon as things don't go their way.

So, to spot a market top, if I had a gun to my head, I would try to measure the level of froth. Now, the second hard question is, how much froth is enough?

Here it gets a bit more interesting.

In the last couple of days, I've actually had a few non-techy aunts and the likes of it reach out and ask me for advice on how to buy bitcoin. And they were quick to buy after I advised them how, also. So, does that mean that markets are frothy and it's time to sell?

No. Sure, there is some level of froth, but I also have to think about just how frothy the market *could* get *this* time around. (I can just hodl if I'm unsure, remember?)

I make a habit of going by my more extreme estimates, because I don't *have* to trade. I can just hold.

If I am going to trade, I would only do it in extreme circumstances. I'd rather make one really really good trade in a year than 20 mediocre ones. So I have patience, and I only trade if the level of froth or fear reaches a peak beyond what I had imagined.

And no, one of my aunts asking about bitcoin is *not* an example of such an extreme peak.

This time around, I, like many, see the potential of a very extreme peak. The reason is because our current macroeconomic climate is unprecedented--our economy is being flooded with money.

On top of that, we've just witnessed an unbelievable level of endorsement from the financial elite in favor of bitcoin. And we know this time that the price is being driven both by institutions and retail at the same time now. All in a time where cash is abundantly cheap.

So, what I'll need to see in order for my higher estimate of froth to have been reached, is an unprecedented level of froth. It'd need to be at the level where I could speak to anyone on the street & say I work as bitcoin trader and they'd go "oh shit, what's that been like?"

All I can say is that right now, we are not near that level yet at all yet.

Things need to get ridicolous. Last time around, things got completely ridicolous. Steven Seagal became the brand of a bitcoin fork called "Bitcoiin". Pablo Escobar's brother did it for "Dietbitcoin".

*These* are the things I'll be looking out for, not lines on a chart. The most ridiculous (& frothy) thing I've seen so far was Ricky Lake shouting at people to HODL, but that didn't even feel ridicolous (bitcoin has become a lot more mainstream).

So that's it. To summarize:
- no price targets
- trade based on froth
- only trade if certain, holding is fine
- froth could get extreme this time
- thesis: almost everyone will know about bitcoin's rally when this thing pops
- unclear at which price that happens (but not yet)