It's always easier to look back and see what should have been obvious at the time. This is a short case study of how one COULD have traded Bitcoin successfully from it's last epic run of 2017. This should be a precursor to what happens in 2018 and going forward. It isn't a 'method', but is an observation and an opinion that will guide my own trading going forward. A year in Bitcoin is like a decade in almost any other stock. This presents numerous insights.
We see that from late 2016 onward we had a series of higher highs / higher lows. If one simply applies a basic 14 period RSI oscillator to the chart and looks at price action, they would see that as long as Bitcoin was making higher highs and higher lows WITHOUT any significant divergence it would have been foolish to take profits / time the market / etc. The price retracements from where the RSI gets into overbought (sometimes significantly) territory simply weren't that large. Taking profits would certainly have led to feelings of accomplishment and $$$ but one would have missed out on even greater subsequent moves. It simply made more sense to be in the market, rebuying at times like July and September when BTC/USD dipped into oversold territory (while still making higher lows - although July is arguable). Note that there really isn't any divergence of mention between price and the oscillator during this time.
It isn't until we get to December that we start to see some extreme bearish divergence. Price careens upwards and pauses on 12-17. The oscillator makes a markedly lower low. While in hindsight it was probably impossible to time profit taking unless you were glued to your screen / phone, this was the first real time in the year long bull run to considering pausing and selling. The sharp move downwards over the next few days wipes away nearly half of the coin's value. Ouch!
Lessons:
Don't bother paying attention to oscillators in trending markets unless they are showing signs of divergence. Selling / timing the market will in all likelihood lead to regret / FOMO / emotional trading decisions.
If there are signs of divergence after an especially massive run, take profits immediately. Waiting could lead to massive hemorrhaging of profits.
As long as the crypto is making higher highs / higher lows feel free to rebuy in wherever it feels right to do so, especially when it gets into oversold territory.
Let's see what the rest of 2018 brings. I'll be sitting around enjoying life until there is some clear indicator of where the market is headed.
Note: this same analysis could apply to a number of other coins. I haven't checked.