Hello!
A couple of days ago I wrote a Leofinance post about my change of strategy regarding crypto.
I have been ignoring the benefits of Dollar Cost Averaging for so long and now it is time to take action.
Today I wrote a post from @khaleelkazi talking about this. He pointed some examples and showed the numbers in terms of ROI from this strategy applied to Bitcoin.
I think that this strategy is highly recommendable if you are trading High-Volatile assets like cryptocurrencies, but it is specially interesting applied to Bitcoin.
In the following lines I will tell you why.
First, it is really difficult to predict the price of Bitcoin short-term. From my point of view, this is one of the most difficult assets in terms of price prediction short term. It is really volatile and its market could be manipulated easily by Whales.
This scenario is perfect for the Dollar Cost Averaging strategy.
Second, if you think that the price of Bitcoin will go up in the long term. It is better to be in the market than wait for a dip.
The main reason is easy, What if you never see a dip again to this prices?
I've heard many times... "This is the last time to buy Bitcoin under 6K".
I am not convinced this is the time we will never see Bitcoin again Below 10k, however I want to be in if it never happens.
If you mix this mentality with the difficult price predictability short term, seems quite reasonable to think that DCA is a good strategy.
But there is more...
Look at the 200WMA of Bitcoin.
Here a chart published from one of my favorite twitter users @100trillionUSD.
The 200-WMA is the 200 Weekly Moving Average.
Is one of the best indicators to identify long-term changes in direction of an asset price. Usually between Bearish/Bullish.
There are some facts pointed by @100trillionUSD that I want to share with you:
- 200WMA just passed $6000.
- Bitcoin never dipped below 200WMA.
- 200WMA never decreased.
- 200WMA is increasing with $200 every month.
So, what do you think about it?
I find it fascinating!
Cheers! 😊
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