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Unlock the Potential of Bitcoin with Dollar Cost Averaging – It’s Time to Start!

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Dollar Cost Averaging: A Savvy Strategy for Bitcoin Investors


I wrote over the weekend that bitcoin (BTC) was about to reprice because the technical showed a volatility compression that very frequently precedes a repricing.

The Intraday Bitcoin Chart

Here is that same chart over a year:

Bitcoin’s Volatility and Breakouts

Bitcoin has a history of compressing volatility before major bull moves but in the broader asset arena such calm can be before a big fat drop. As such, the trader should stake out these lulls and pile in on the breakout.

Recent Bitcoin Price Movement

Then yesterday before the article was posted… KABOOM:

Is it Time for a Big Rally?

So is this now time to jump in for a big rally; a rally to perhaps $40,000?

I haven’t, because while it is possible or even probable, this move is not a signal to jump in boots first. It is a very positive signal, but for the investor there needs to be conviction on top of technical.

Uncertainty and News Driven Moves

To trade in an asset in a major way, the level of uncertainty needs to be extremely low and while the chart has been trading as if its uncertainty is low, this move is “news driven” and news is a fickle indicator. Bulls will simply need a new high above yesterday’s explosive rally to confirm that a new bull is on stage with a big upside while a bear will see that if the price keeps falling off then it will be the start of a move to $23,000.

Dollar Cost Averaging as a Strategy

What to do?

To me, now is a reasonable time to start a dollar cost averaging (investing the same amount of money at regular intervals) campaign as we are approaching the bitcoin’s new halvening in April, 2024. If the effect of less supply takes some time to move the price up, like last time, a year of dollar cost averaging seems like a solid plan. So in this instance, an investor gives himself a budget, say $12,000, and buys $1,000 a month from now until this time next year. There is so much to go wrong and so much to go right in the coming months that trying to time a positive outcome of bitcoin’s increasing adoption and the halvening event seems like an impossible task. Dollar cost averaging at least will give a sensible entry price for what is ahead for the crypto believers who feel bitcoin will win out again, be that to $100,000 or £1 million.

Flexibility and Long-Term Conviction

If the action starts to unfurl the way a trader expects, they can always accelerate their acquisition and if the market goes south, a 12-month campaign will soften the blow for the long term conviction holder.


The lesson is broader, however. Whether it’s a crypto or an equity, compressions in volatility precede repricing events. So keep an eye out for them in stocks, commodities, Forex, and well as cryptos. It’s a handy tool to keep in your investing kit.

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