I have a friend that has that kind of strategy, he's leaving the total capital in fiat and takes profit if he has. But I don't think that he has plans of rebuying.

Remember that little or big profit, it's still profit.

its hard to tell when to buy and sell bitcoin. price is hard to predict but because of the incoming halving there a possibility that the price will rise more in the next few months but there also a possibility that it will drop again before the price rise again . but for me its better just to hold it right now and wait patiently until halving if you want to gain more profit.

Your opinion is not bad but your only problem is how to know when the market will rise and fall. That is the common problem to all of us either you are a holder or a trader.

Because if you can at least predict the up and downs of prices then you can surely multiply your investment using your technique.

Maybe it is good to get the profit out from your investment  and let the investment keep where it is because we cannot predict when the coin going to dump or will continue to rise up. You have to analyze the market, if you see that it wont go down far then do put it there and multiply more. It depends how you take the risks.

I think your profit will multiply if you use it in trading but if you just wait the time that bitcoin will go down again before you buy I think you can still make profit but the problem is no one knows when bitcoin value go up and down.

But with that profit, it will be hard to multiply it because of low coins that you will hold. Taking out your capital is good but make sure you have enough profit to play in the market before you do that. I do suggest to play that $500 for one whole year and after that you can now safely withdraw your capital and continue trading with your profit.

Well no one really knows what will happen to the cryptocurrency market it may go down or up in a minute, hour, day, moths etc. So you need to analyze carefully and decide for yourself because it's your investment and if your decision is correct then good for you but if it's bad then you can't blame anybody but yourself.

In my opinion if you invest in Bitcoin it's better to relax and not think satisfied with what you have now because I believe Bitcoin will continue to grow, if you make a decision to sell, I'm sure you will regret selling it, but all decisions are in the hands You, how you think about it yourself and you also have to look at the global market price situation so you don't lose your investment.

You should consider following the strategy to reduce the risk of losing all your investment capital, by buying low and selling high and then keeping the profit. Example : You buy 1 bitcoin @ $10 000 and then sell it when the price reach $11 000 for a profit of +/- $1000 <remember there are fees> and then put that $1000 somewhere else.

You then wait for the price to come down again to $10 000 and buy a bitcoin again and rinse and repeat that strategy, until you have enough profit to cover your $10 000 that you are risking every time.

So after this, your $10 000 investment will be virtually 0% risk, because you not using your own capital, but rather the profit you made.

< I rounded it off to 1 bitcoin to make it easier to understand, but it can be any amount of bitcoin or Satoshi's>