ATH in crypto: from theory to practice of trading at the peaks

When the cryptocurrency market gains momentum ahead of significant events like Bitcoin halving, investors inevitably recall the euphoria of 2021. Back then, BTC’s price soared to $69 040,10 — a level that many now hope to surpass. Today, in the era of a new bullish cycle, understanding what a historical maximum (ATH) is and how to trade it becomes critically important.

What does ATH mean and why is it important

An all-time high (ATH) is simply the highest price point an asset has reached in its entire trading history. The concept originated in traditional finance but has gained special significance in crypto. When a company’s stock hits a new ATH, it usually signals the company’s health. With cryptocurrencies, the situation is similar — a new maximum often indicates growing interest and potential for project development.

Important nuance: ATH can refer both to the coin’s price and its market capitalization. When token burns occur and supply decreases, market cap can reach new heights even if the price per unit is below the previous maximum.

Two types of maxima: price and capitalization

Traders typically monitor both indicators. The price ATH shows the maximum amount one coin has ever traded for. The capitalization ATH considers the total value of all units in circulation — it’s the product of price and the number of coins.

Sometimes these maxima do not coincide. For example, Bitcoin’s distribution changed during the last cycle, affecting market cap independently of price. Understanding this difference helps make more informed decisions.

What happens at ATH level: market psychology

When the price approaches its historical maximum, the market enters a state of increased volatility. Two powerful forces collide at this level.

On one side, traders with open long positions take profits, setting stop-loss or take-profit orders right at the ATH level. On the other, newcomers, driven by FOMO(, rush to enter positions, hoping to catch the final surge. Sellers create significant pressure, as ATH is traditionally a resistance level.

Bullish strategy: trading on an ATH breakout

If you believe the maximum will be surpassed, here’s how to act cautiously.

Preparation and signal identification. Analyze weekly and daily charts. Look for consistent price growth toward the ATH with increasing trading volumes. This indicates rising buying pressure. Positive news about the project or macroeconomic factors will strengthen the bullish case.

Entry point. The ideal moment is when the price closes above the ATH with confirmation on the next candle. Moving averages and volume indicators will help verify the breakout’s authenticity, avoiding false signals.

Risk management. Place a stop-loss slightly below the ATH level. If a false breakout occurs, you minimize losses.

Profit-taking. As the price rises, close your position using a trailing stop — which automatically follows the upward movement, allowing profits to grow while preserving achieved gains. Alternatively, set target points based on technical analysis in advance.

Bearish strategy: earning on a pullback

Not everyone believes in continued growth. Experienced traders often profit from pullbacks following a peak.

Recognizing a pullback. A pullback is a downward movement after the price fails to hold above the ATH. Signs include increased selling, falling volumes, and inability to restore an uptrend. RSI and MACD indicators will suggest when momentum is waning.

Entering a short position. Wait for confirmation of the pullback: the price should fall below key support levels. Then, you can open a short position by borrowing the asset and selling it, then buying back cheaper later. Derivatives — futures and perpetual swaps — can also be used.

Stop-loss and exit. Set a stop above the ATH in case the short goes against you. Lock in profits with a trailing stop downward or predefined targets.

The opposite indicator: ATL and its role

ATH has a mirror image — the all-time low (ATL). This is the lowest price point of the asset. While ATH signals growth potential, ATL can raise concerns.

However, ATL does not guarantee disaster. It simply reflects past problems, not a prediction of the future. Experienced traders see ATL more as an opportunity to buy projects with solid fundamentals rather than a reason to panic. The key is to focus on the project’s fundamentals, not just price levels.

Current Bitcoin situation: when was the last ATH?

According to recent data, Bitcoin reached an ATH of $126,08K, significantly surpassing the previous high from November 2021 )(040,10). The current BTC price is around $96,03K, leaving room for potential growth.

This fact demonstrates the cyclical nature of the crypto market: each new bull cycle typically exceeds previous highs, albeit with different timeframes.

Rules for successful trading at ATH

The main principle: never trade solely based on emotions around the ATH. FOMO is the enemy of rational trading.

Before entering a position:

• Conduct technical analysis: study charts, volumes, indicators
• Evaluate fundamentals: technology, development, project news
• Calculate risk: is the potential profit ratio adequate compared to potential losses
• Stick to your plan: predefine entry points, stops, and targets

Conclusions

ATH is not just a number on a chart. It’s a psychological level where demand and supply clash, where newcomers meet professionals, and where emotions battle with logic.

Understanding ATH in the context of technical analysis, risk management, and fundamental research of the project is the key to success in the volatile crypto market. Don’t chase highs without a plan, and remember: past price history does not guarantee its future.