Historical high (ATH) in crypto: how to use it in trading

With each new bullish cycle of the crypto market, the prices of major assets, including Bitcoin, surge upward. When BTC’s value approaches key levels and FOMO(fear of missing out) grips traders, there is a demand for understanding what an all-time high (ATH) is and how it influences trading decisions.

Definition of ATH and its role in crypto trading

All-Time High (ATH) — is the highest price that a crypto asset has ever reached since its market debut. It is one of the key indicators traders monitor when analyzing volatility and the potential growth of a coin or token.

The concept of ATH originated from traditional finance (TradFi), where it is used to assess the performance of stocks and other assets. When a company’s stock hits a new ATH, it is often seen as a sign of strong financial health. In the cryptocurrency sphere, ATH also serves as an indicator of investor interest and the project’s potential development.

It is important to note that a cryptocurrency’s ATH reflects the market state at a specific moment in time, not a constant price level. Prices fluctuate every second, so ATH is essentially a historical snapshot.

( ATH price and market capitalization

There are two ways to track ATH:

1. ATH price — the highest value per unit of the asset
2. ATH market capitalization — the total value of all tokens in circulation

Market capitalization is calculated by multiplying the circulating supply by the current price. Sometimes, a project may set a new ATH in market cap even if its price does not reach the previous maximum. This can happen during token burns, when supply decreases and the value per unit increases.

History of Bitcoin’s ATH and current status

Bitcoin, as the first and largest cryptocurrency, has reached impressive peaks during periods of active market growth.

As of November 10, 2021, BTC set its then-record ATH at )040,10. This period coincided with intense crypto euphoria and active interest from institutional investors.

Currently, according to the latest data, Bitcoin trades around $95.97K, and its new ATH is set at $126.08K, indicating a continuing bullish cycle and rising market expectations.

ATH and ATL: opposite indicators

If ATH is the peak, then the all-time low (ATL) is the bottom. ATL represents the lowest price at which a crypto asset has ever traded.

For traders, these two indicators serve as important benchmarks:

• ATH signals increasing demand and market optimism
• ATL may indicate past difficulties of the project but does not guarantee a repeat of low prices

It is critically important to remember that the historical minimum does not predict the future. Some experienced traders view ATL as an entry point for projects with strong fundamentals, but this requires careful analysis and risk management.

What happens in the market when reaching ATH

When a crypto asset approaches or hits its historical maximum, significant changes in trader behavior are usually observed:

Seller pressure: Many traders with open positions set stop-loss and take-profit orders at the ATH level, so as it approaches, active position closures begin.

FOMO influence: Simultaneously, newcomers and those who have been waiting for the right moment start buying more actively out of fear of missing out on the rally.

Resistance level: ATH often acts as a powerful resistance level, where strong pressure from both buyers and sellers converges.

The outcome of this confrontation can vary: the market may break above, pull back downward, or enter a sideways trend.

Bullish trading strategy: trading on the breakout of ATH

For traders who believe in continued growth, breaking above the ATH can be a profitable opportunity.

How to identify a breakout opportunity

Before entering a long position, analyze the technical chart:

• Look for a consistent price increase leading up to the ATH level
• Pay attention to increasing trading volumes
• Watch for positive news about the project’s development

These signals indicate rising buying pressure that may be enough to overcome resistance.

$69 Entry point and risk management

The optimal entry point is when the price confidently breaks the previous ATH on rising volumes. Use technical indicators (moving averages, volume, momentum) to confirm the breakout’s validity.

To protect against losses, set a stop-loss slightly below the breakout level. This will safeguard you from false signals and sharp reversals.

Profit-taking during long trades

As the price rises, gradually close your position. Use trailing stop-loss orders that automatically follow the upward trend and lock in profits during pullbacks. You can also set predefined take-profit levels based on technical analysis.

Bearish trading strategy: trading on pullbacks

Not all traders see ATH solely as a buying opportunity. Experienced speculators profit from pullbacks, which often follow after reaching peaks.

Recognizing a pullback after ATH

A pullback is a downward price movement after the market fails to hold above the ATH. Signs of a pullback include:

• Weakening momentum after reaching a maximum
• Increasing seller pressure
• Falling trading volumes during an upward move

Technical indicators like RSI (Relative Strength Index) and MACD can help identify potential trend reversals.

Opening short positions

After confirming a pullback, consider opening a short position. This involves borrowing the crypto asset, selling it at the current high price, and buying back at a lower price to realize a profit from the difference.

Ensure there are clear signs of bearish momentum before entering — such as falling below key support levels or inability to restore the upward movement.

Stop-loss and position management

When shorting, set a stop-loss above the ATH level to limit losses in case of a sharp recovery. Use trailing stop-loss to lock in profits as the price declines.

Common trading mistakes during ATH

Trading based solely on emotions: Do not make decisions just because the market approaches a maximum. FOMO and euphoria often lead to losses.

Ignoring fundamental factors: Technical analysis is useful but should be complemented by research into the project, its development, and real utility.

Lack of risk management plan: Without a clear stop-loss and position sizing, even correct trading ideas can result in catastrophic losses.

Overestimating the significance of ATH: Hitting a historical maximum does not guarantee further growth. The market can reverse at any moment.

Frequently asked questions about ATH trading

What happens after a cryptocurrency hits a new ATH?

There is no definitive answer. The market may continue rising, undergo a correction, enter sideways consolidation, or sharply reverse. It all depends on momentum, market conditions, and fundamental factors.

Should I trade only when approaching ATH?

No. Such an approach is overly risky. Always conduct comprehensive analysis: study technical indicators, evaluate fundamental project metrics, analyze risk-reward, and follow a clear trading plan.

Can ATH be an indicator of a project’s success?

Partially yes, but not entirely. A high ATH indicates investor interest but does not guarantee long-term success or stability. Evaluate the project holistically.

What indicators help confirm a breakout above ATH?

Use moving averages, trading volume, RSI, MACD, and other momentum oscillators. Confirmation from multiple indicators increases the reliability of the signal.

Final recommendations

ATH is one of the most important benchmarks for crypto traders, but it should not be used as the sole decision criterion. Successful ATH trading requires:

• Combining technical and fundamental analysis
• Strict risk management rules
• Emotional control and discipline
• Continuous learning and adaptation to changing market conditions

Remember that cryptocurrency prices are volatile and unpredictable. Trade responsibly and never risk more than you can afford to lose.