tastytrade logo
Chocolate Bitcoin and money

Oct 14, 2021

Bitcoin: Buy or Sell the Highs?

By:Frank Kaberna

Most traders view new highs one of two ways:

  1. Buy a market that’s performing better than ever!
  2. Sell a market at its greatest premium ever!

Last week, Small Stocks posted new highs for the last decade, natural gas did the same for the last decade, and Bitcoin blew out highs for the last several months to the tune of a 35% rise since September 29th.* So, should you buy or sell?

Highs in Stocks, Natural Gas, and Bitcoin

Source: Yahoo! Finance (https://finance.yahoo.com/) and dxFeed Index Services (https://indexit.dxfeed.com)

Bitcoin’s Price (Re)Action at Highs

How a market has historically traded at highs could help in deciding on a strategy once they’ve made new highs. Bitcoin poses an interesting trend, whereby it moves lower in the days following a high but extends much higher afterwards, on average.

Bitcoin’s Average Move After New High in 2021

Next Day

Next Week

Next Month




Source: Yahoo! Finance (https://finance.yahoo.com/) as of 10/7/21

This type of price action can pose an interesting contrarian play for traders in the short term and trend trade for those looking through a long-term lens. Though the jury’s out on the next month of movement, Bitcoin did in fact reverse after last week’s highs.

Bitcoin’s Price Risk at Highs

But averages aren’t guarantees. Contrarians and trend followers alike should assess the risk around these averages, which is thousands of dollars.

Bitcoin’s Standard Deviation After New High in 2021

Next Day

Next Week

Next Month




Source: Yahoo! Finance (https://finance.yahoo.com/) as of 10/7/21

The amount of risk doesn’t necessarily sterilize the edge that the averages might present, but, rather, it can be a reason to lessen your exposure to the edge.

Bitcoin is not lacking in the opportunity department, but it has only recently seen the arrival of smaller, more accessible products with Small Crypto futures.

Follow us on Twitter: https://twitter.com/small_exchange

Subscribe to our YouTube Channel: https://www.youtube.com/channel/UC5pAsul3H_7FYuPmZscClrA

*Futures data from Yahoo! Finance (https://finance.yahoo.com/) and dxFeed (https://indexit.dxfeed.com) as of 10/7/21

© 2021 Small Exchange, Inc. All rights reserved. Small Exchange, Inc. is a Designated Contract Market registered with the U.S. Commodity Futures Trading Commission. The information in this advertisement is current as of the date noted, is for informational purposes only, and does not contend to address the financial objectives, situation, or specific needs of any individual investor. The information presented here is for illustrative purposes only, and is not intended to serve as investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Trading in options, futures, and ETFs is not suitable for all investors. The risk of loss in the trading of options, futures, and ETFs can be substantial. Trading in derivatives and other financial instruments involves risk.

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Related Posts

tastytrade content is provided solely by tastytrade, Inc. (“tastytrade”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. tastytrade, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastytrade is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparison, statistics, or other technical data, if applicable, will be supplied upon request. tastytrade is not a licensed financial advisor, registered investment advisor, or a registered broker-dealer. Options, futures and futures options are not suitable for all investors. Prior to trading securities products, please read the Characteristics and Risks of Standardized Options and the Risk Disclosure for Futures and Options found on tastyworks.com. 

tastytrade is a trademark/servicemark owned by tastytrade.

tastyworks, Inc. ("tastyworks") is a registered broker-dealer and member of FINRA, NFA and SIPC. tastyworks offers self-directed brokerage accounts to its customers. tastyworks does not give financial or trading advice nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastyworks’ systems, services or products. tastyworks is a wholly owned subsidiary of tastytrade, Inc (“tastytrade”).

tastyworks, Inc. (“tastyworks”) has entered into a Marketing Agreement with tastytrade (“Marketing Agent”) whereby tastyworks pays compensation to Marketing Agent to recommend tastyworks’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastyworks. tastytrade is the parent company of tastyworks. tastyworks and Marketing Agent are separate entities with their own products and services. tastytrade has different privacy policies than tastyworks.

Quiet Foundation, Inc. (“Quiet Foundation”) is a wholly-owned subsidiary of tastytrade The information on quietfoundation.com is intended for U.S. residents only. All investing involves the risk of loss. Past performance is not a guarantee of future results. Quiet Foundation does not make suitability determinations, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of Quiet Foundation’s systems, services or products.

© copyright 2013 – 2022 tastytrade. All Rights Reserved. Applicable portions of the Terms of use on tastytrade.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastytrade’s podcasts as necessary to view for personal use.