Take a Step Back and 10x Your Portfolio
When I first got into Bitcoin, almost nobody knew anything about the industry. These days, when you walk around and ask people if they know what Bitcoin is, they not only know it but they can likely recite some party line like: "oh yeah, it's down a lot now, isn't it?"
It's funny how these party lines resonate and have a resounding impact on retail investors. Most people are stuck looking at price action and then disappear for a while. The last they heard about BTC was that it fell from $60k and is "low" and the next time they start paying attention will be when it starts getting close to $60k once again.
It's funny how that works, isn't it?
Time in the Market Over Timing the Market
Time in the market will always be superior to timing the market. Retail investors are especially delusional in thinking that they can find some kind of "edge" when looking at markets.
I can't tell you how many countless people have told me that they have some kind of indicator, bot or other piece of information that tells them what BTC or a stock price movement will occur next.
Instead of timing the market, consider how explosive your portfolio gains will be if you focus on generating more cash flow and then dollar-cost average into the markets consistently and over long time periods.
Taking a Step Back on Bitcoin
I find on-chain analytics for BTC to be quite fascinating. There are a lot of stories you can tell from the movement of Bitcoins in wallet addresses.
For example, this RHODL indicator tracks the value of BTC held in wallets. It shows the age of the coins in those wallets.
In the chart, you can see that the end of 2015 / 2016 (where it bottoms) shows a lot of coins held in wallets that were "older"... meaning that they had been held in that wallet and not moved for a while.
Then you can see in 2018/19 where the amount in new (younger) wallets peaked.
What I find interesting is the inflow and outflow of coins. What we see happening right now is that the value of coins held in older wallets peaked once again. We're starting to see the rise once again from the HODLer to the Specualtor.
This cyclical movement in coins is quite telling. It could be accurate or it could not be.
My Point
I never look at one indicator to tell me what time to get into the market. I have already decided that BTC is an asset that I want to continue dollar-cost averaging into over a long timeframe. For the next several decades, I want BTC to be a major holding in my portfolio.
Data like this can give us some indications and ideas about the future. Possible stories to tell ourselves. The story I have been thinking a lot about is when the next bull market in crypto will take us back to all-time highs.
While it does not matter much in terms of my DCA strategy, it can have a big impact on my exit strategy.
I don't sit here and try to find "the best time to buy" and "the best time to sell". Instead, I zoom out and I DCA in and then eventually DCA out.
Right now, all indicators are continuing to support my DCA In strategy.
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This is very informative. Keep sharing your knowledge about the coin movements. Very important to study the markets...
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This is Hive and Leo for me, maybe BTC in some distant future or who knows, could start happening sooner than later
The increasing awareness of Bitcoin among the investors is evident and volatility became a habit. The movement of assets in wallets reveals cyclical patterns, providing some insights into potential market trends. While these indicators can inform entry or exit strategies, the priority remains a long-term DCA approach for portfolio management for the best performance. This is the way!
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Thanks for sharing this great information
There are a lot of people that think they know a lot of bitcoin if they are aware when it's down or up the market, but in reality the domain is a lot more complex and honestly I don't think there is anyone out there knowing everything about it! :)
Retail investors who come when the price is going up and begin to leave when the price is going down will always miss out on having a good overview of the market and how things will unfold. I also try to think years ahead when it comes to crypto investments, in it for the long haul. Having a strategic plan is always necessary. Thanks for the insight :)
This is similarly to what i planned on doing with my tokens. Keep stacking both Leo & Hive, then powering up at the right time until i reach my goals.
It’s good i get to learn more from you via your posts.
I still think people need to know more about BTC. Some of my friends made fun of me when btc fall from 65k to 40k but when i told them that i was here when btc was 20k they started scratching their head.
Now again my cousin and friends don't believe in bitcoin but when i tell them about how btc climbed 2X since january they are again in shock.
It is long term game and DCA is the perfect way to make the more number of satoshis. I recently bought a cloud mining plan worth 15 dollar that is giving me 800 satoshis daily. This will continue for 90 days so i am not worried about profit and loss but happy about the fact that i will have 65-72k satoshi by the end of 90th day.
Great post. I believe DCA is a great strategy, thinking long-term.