During its bullish cycle, Bitcoin (BTC) has overcome up to seven painful corrections. Each of them unlocks spicy dollar cost averaging (DCA) opportunities for every macro investor: an on-chain analyst indicates three crucial levels of the price drop to look at.
Bitcoin (BTC) drawdowns are best for DCA, CryptoQuant analyst says
By strategically investing during regular BTC price drawdowns and leveraging techniques like dollar-cost averaging (DCA), crypto traders can potentially enhance their returns while managing risk. Such a suggestion was shared by an on-chain analyst who goes by @IT_Tech_PL on X.
#Bitcoin Corrections: Strategic Investment Opportunities“By strategically investing during these drawdowns and leveraging techniques like DCA, investors can potentially enhance their returns while managing risk.” –By @IT_Tech_PL Read more 👇https://t.co/gLIf7dF1fH pic.twitter.com/93UwQONf27
— CryptoQuant.com (@cryptoquant_com) July 22, 2024
In his latest "Navigating Bitcoin Corrections: Strategic Investment Opportunities" review, the researcher analyzed the prospects of using the BTC Price Drawdown Analysis chart by CryptoQuant. The chart demonstrates the relative affects of the drawdown (the deepness of the plunge) compared to local price highs.
While the chart demonstrates "zones" of 10%, 15% and 20% drawdown thresholds. The most painful zone on this chart looks the most attractive for macro investors, the analyst says:
The red and brown drawdown areas (15-20% corrections) can be viewed as strategic buying opportunities.
Instead of trying to find the bottom of each drawdown, using DCA might be a smart bet. This technique is designed to reduce the risks and develop a more balanced buying strategy on a growing market.
Also, checking market sentiment might be a valuable additional tool for uncovering purchasing opportunities for Bitcoin (BTC).
Bitcoin (BTC) getting through 35-45% drawdowns every cycle
Periods of significant drawdown often coincide with negative market sentiment, which can present buying opportunities for those with a long-term perspective, the analyst concludes.
As covered by U.Today previously, going through 35-45% corrections is a natural behavior for Bitcoin (BTC) in every bullish cycle.
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For the existing 2022-2024 rally, the March-June 2024 26% price drop is the most painful correction so far. Once it ended, the Bitcoin (BTC) price added almost 22% in two weeks to reach the current local high over $68,000.
By printing time, Bitcoin (BTC) is changing hands at $67,200, up 0.6% in the last 24 hours.
