What is ATH and how to face it?

Have you come across the term ATH during your trading in the market? This concept, far from being simple financial jargon, represents a crucial moment for any investor.

The meaning of ATH

ATH, or “All Time High”, marks the highest price that a cryptocurrency has reached in its entire history. It is not just a number on a chart; it symbolizes success and reflects market interest in an asset. When this happens, euphoria sweeps over investors and traders.

The irony of the ATH lies in the fact that, although we all dream of buying low and selling high, acquiring at this point often turns out to be disastrous. During an ATH, bullish pressure dominates the market with hardly any bearish resistance. Unfortunately, many traders abandon technical analysis at this point and let intuition take over, making reckless decisions.

Strategies in the face of an ATH

When identifying ATH signals, you should apply tools like Fibonacci and moving averages:

Analyze the impulse The market functions like a spring: it needs to correct to gain momentum and establish new highs.

Use Fibonacci This sequence offers key support and resistance points (23.6%, 38.2%, 50%, 61.8%, 78.6% and 100%) that act as horizontal levels on the chart.

Check the moving averages These lines predict possible fluctuations. If the price is below the moving average, it could indicate a bearish trend.

Rules for Trading

Although it seems that resistance disappears near the ATH, there are hidden factors waiting to surprise investors. After reaching highs, the market often enters a period of adjustment that can last weeks or months, ruining newcomers. To minimize risks:

Examine the price break in its three phases: action (break of resistance with high volume), reaction (weakening of momentum) and resolution (change in buy-sell dynamics).

Identify patterns such as round or square bottoms below the breakout point.

Locate new resistance levels using Fibonacci from the low to the breakout.

Set profit protection by defining a minimum acceptable profit.

Increase positions with caution, only with a favorable risk/reward ratio.

What to do when you are already at ATH

If you hold assets in ATH, you have three options:

Hold everything if you are a long-term investor and believe in fundamental value.

Partially sell, using Fibonacci extensions to identify psychological resistances.

Fully liquidate if the Fibonacci extensions align with the ATH, suggesting the end of the bullish trend.

Have you found yourself trading during an ATH? Your experience could help other investors navigate these turbulent waters.

Legal notice: Contains third-party opinions. It does not constitute financial advice. It may include sponsored content.