Bitcoin hits new high: What smart investors are doing next

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Bitcoin's meteoric rise continues, so is it too late to buy in?

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Bitcoin has jumped more than 20% in the past few months, climbing past US$124,000 on Thursday to set a new all-time high.

That’s up from its previous peak just a month ago, as steady institutional inflows, pro-crypto policy signals and Bitcoin ETF demand continue to fuel the rally.

That paired with the likelihood of further cash rate cuts from the Federal Reserve, and we might expect Bitcoin to tap a few more records before the year is out.

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With Bitcoin's upward trend showing no signs of slowing, the big question is whether investors should ride the wave or wait for the next dip.

Unfortunately no such crystal ball exists. But there are a few strategies you can consider depending on your goals and risk appetite.

Buy in using limit orders

The standard line for investors is to buy when prices are falling and sell when they're up, but that's not the only way to play the market.

Buying more of one asset when its price is rising is called 'averaging up' and it's a strategy often used by active traders who believe momentum will carry prices even higher.

The risk is that you’re potentially buying at or near the top of a cycle. But if Bitcoin’s bullish run continues, averaging up can increase your overall gains.

To help avoid emotional trades, some investors use limit orders to buy in at predetermined price points during small pullbacks.

For example, Bitcoin's price fell over 4% overnight following hotter than expected inflation data out of the US -- a move some investors would certainly have scooped up.

Why selling can make sense

If you’ve hit your target price or your portfolio is heavily weighted toward Bitcoin, taking some profits off the table can help lock in gains and reduce exposure.

Selling a portion means you still have skin in the game if prices keep climbing, while protecting some of your capital if the market turns.

This is similar to the dollar-cost averaging strategy where you invest small amounts at regular intervals, but instead you're doing the opposite by selling.

As with buying in, you can also set limit orders to sell small amounts when the price of BTC rises above a certain level.

Look out for other coins

Sustained Bitcoin rallies often lift the entire crypto market, with altcoins and blockchain-related tokens frequently catching tailwinds.

If you’re considering diversifying, research potential projects that could benefit from increased market optimism — just avoid chasing hype without understanding the risks.

For example, Ethereum has surpassed Bitcoin in recent months, rising a whopping 60% since June and closing in and quickly closing in on its own new all time high this week.

To make the most of these trends, it makes sense to set up watch lists and price alerts through an exchange.

The sit back and relax strategy

Sometimes the smartest thing to do during a market rally is to sit back and do nothing at all.

The reality is that active traders that try to time the market often fail to catch profits.

So rather than stressing over every price movement, the best approach for most investors is taking a long-term approach: buying, holding and ignoring the noise.

Bitcoin’s volatility can be brutal. After all, if you’d bought BTC in January, you’d have seen it drop 30% by April, only for it to rebound and leave you up around 20% today. Patience can pay off.

If you’re looking for your next step, Kraken offers tools for both beginners and seasoned traders — from buying and selling Bitcoin in a few clicks to exploring hundreds of other digital assets.

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