Cryptocurrencies All-Time High (ATH)
ATH Crypto: Meaning, characteristics, and tips on what to do with cryptocurrency all-time highs
All-Time High is a term you will often find in the crypto space, but what does ATH mean in crypto?
This article will cover this exciting concept to give you all your needs.
First off, we will analyze the meaning of ATH in cryptocurrency: not just a simple definition, but what this means for traders, investors, and markets in general.
We will see that traders react differently when an ATH occurs, especially according to their experience and self-discipline.
Then, the big question: what to do with an all-time high?
Keep reading: we will resolve all your doubts.
What is crypto ATH?
All-Time High indicates the highest price an asset reached from its launch. Of course, the ATH can change over time.
Traders usually wait for the ATH of an asset because it represents a sort of watershed: it means a point where a significant change is about to occur.
Even if no one can know where an all-time high will occur, when the price of an asset reaches its highest price, it's time to clear long positions or flip them.
Don't be scared by high prices: the crypto market is well-known for being extremely volatile.
This happens mainly for two reasons:
- There aren't as many participants as in more traditional markets;
- There is not only one exchange where you can trade even if the price of a cryptocurrency tends to be similar on all exchanges, but it also can't be the same everywhere. When talking about all-time highs, crypto traders and investors usually are talking about a specific exchange, the one where the crypto reached its highest price.
While crypto is on its path towards an all-time high, many traders start thinking that it's time to sell but don't rush it: there are some techniques that can help you to spot an ATH.
Can you predict an ATH? What to do and what to avoid.
Most experienced traders usually know when an ATH is about to occur. This happens because cryptos with enough liquidity can be analyzed by following some of the most famous trading strategies.
Consider trend trading or swing trading: an all-time crypto high corresponds to a swing high or the highest point of a positive trend.
The best thing to do when analyzing markets is to look at the big picture: following good trading strategies requires observing at least a couple of years of charts - better if you observe all data available, and this is quite simple with cryptos because they are relatively young markets.
The markets with more participants allow the most precise analysis: cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) are the most popular and most robust cryptocurrencies around - they are the first and second crypto by market capitalization, respectively - and they are usually used to balance portfolios - that is, traders can choose to trade any cryptos, but it's always better to consider good management of your capital and limit risks.
Analyzing these cryptocurrencies will make you realize that prices usually move in waves: this is the basis of one of the most famous trading theories, the Elliott Waves Theory. From a historical point of view, prices tend to repeat their behavior over time because they depend on people's actions, and these actions depend on people's feelings.
According to this theory, and in very general terms, prices behave as follows:
- A positive trend begins, often after a sideways movement;
- After the swing high - that is, the highest point of a price wave, a short downtrend begins;
- After that, a third positive wave starts, followed by another short downtrend;
- The last positive wave starts, and the high is reached for that semi cycle;
- A long downtrend starts, followed by a sideways movement, then the cycle starts again, leading to higher prices than the previous cycle. This very point is why many investors suggest holding - or HODL - even when things look highly uncertain.
Every single wave is the result of people's feelings and reactions to the market.
But trying to spot a possible ATH also requires the observation of reliable indicators: the most reliable one is volume because it's an objective indicator since it simply tells you how many traders are buying or selling.
Now, if you mix the observation of volume and price movements, you will notice that ATHs usually have some points in common:
- Peaks in volume;
- Candles with a relatively long tail;
- A previous positive wave or uptrend.
Even if this may seem relatively straightforward, it is not: people overreact when it comes to cryptocurrencies. The reactions that move prices are so particular that a new terminology was required.
The result is that an ATH can even be the result of FOMO.
Don't worry about every single price movement.
ATH is extremely impressive in cryptos. Let's think of Bitcoin: its last all-time high was at $69,000.
Currently, Bitcoin is trading at around $27,553.40 - that is, -60% from its all-time high.
BTC registered its all-time high price on November 10, 2021.
Bitcoin all-time high aka. BTC ATH
The above chart shows you the history of bitcoin price compared to its all-time high. You can easily see when the most critical time in the bitcoin price history was. BTC has had its ATH five times below 70%, still recovering. In November 2011, it was ~93% of its all-time high, and it took more than a year to recover.
If you're in the crypto space, you know that during the last months of 2021, traders and analysts started talking about 100K everywhere: after all, Bitcoin exceeded all expectations. Moreover, this ATH was too close to the previous one.
Many think that the distance of a price from the ATH of crypto is an indicator: if a price starts rising and exceeds the all-time high, but it's still too close to the previous ATH, it should mean that the price it's still not ready to drop.
But, as we said, it is not that easy when it comes to cryptos.
Consider BTC ATH registered on April 1, 2021 - that time BTC reached almost $65,000 on Coinbase.
This ATH exceeded the very first ATH of Bitcoin by an outstanding 226.27% in 4 years. Can you think of another market that offers such kinds of opportunities?
Volatility is expected in the crypto market, and it's an advantage.
Crypto volatility allows impressive profits, but at the same time, it's the cause of fear and impulsive actions.
When the price of crypto exceeds the ATH, traders have two reactions:
- FOMO, Fear Of Missing Out: people start investing because the asset is hyped, but if the crypto is close to another ATH, they will lose everything - that's exactly what happened in 2017;
- Short: This is usually the movement of intelligent traders. They waited for FOMO, maybe for years, and when people start investing, they start selling, making huge profits - that's why a sudden drop usually follows an ATH.
Smart traders usually don't flip or close all their positions: they want to test reactions and see what happens first, so they start with part of their positions.
This is the reason why price movements can be highly deceptive: if FOMO traders exceed smart traders in volume, they may cause peaks that are simply unnatural in - relatively - liquid markets.
So, when an all-time high occurs, the big question is: this ATH is the result of natural price movements, or is it the result of FOMO? In the second case, losses will be catastrophic for those who don't sell in time.
Unfortunately, no one can give you a specific answer.
Things you can do when you see an all-time high
- Never overreact: remember that volatility and impressive prices are pretty standard in the crypto market;
- Look at the big picture: analyze all the data you can find on that particular asset;
- Rely on the most reliable indicators;
- Avoid the influence of those who try to create exciting markets - or that overreact;
- And remember: no one knows for sure what will happen.
Final Thoughts on all-time crypto heights
Crypto ATHs are the end of a journey that can last even years, so they can't be judged just by considering the last candle.
Traders have many tools to predict ATH, mainly thanks to tested trading strategies, theories, and reliable indicators. No price movement can be predicted with certainty.
The best thing to do when an ATH occurs is to short or flip long positions, but the point is that all-time highs cause uncertainty, FOMO, too much enthusiasm, and news.
The best way to avoid mistakes when ATHs occur is to stay calm and look at the big picture, with a good level of self-control: our tips will help you, and even if success is never guaranteed when it comes to trading, good traders know that staying lucid is the best strategy.
Top 100 all-time high
The Top 100 cryptocurrencies are -58.70% from their ATH today. The closest coins from the top 100 to ATH are PAXG -12.75%, WBTC -13.40%, and XAUT -13.42%, while farthest from their ATH are BTT -99.99%, ICP -99.89%, and FIL -99.22%.