Bitcoin has officially surpassed the $100,000 milestone, marking a historic event in the crypto market. However, many investors are currently debating whether to hold or wait for a better opportunity to enter the market, especially given the crypto market's notorious volatility, where corrections of 20%-30% are common.
Here are some popular strategies to minimize risks and capitalize on the growth season for optimal profits:
1. Investment Strategies
Dollar-Cost Averaging (DCA):
Investors allocate a fixed amount of money to purchase Bitcoin at regular intervals, regardless of price.
Pros: Eliminates emotional decision-making, reduces short-term volatility risks.
Cons: You might accumulate Bitcoin at higher average prices if the market continues to rise sharply.
Buying during small corrections:
This strategy involves buying Bitcoin only during specific corrections, typically between 5%-20%.
Pros: Allows accumulation at better prices, suitable during uptrends.
Cons: Requires close market monitoring and may result in missed opportunities during sustained uptrends.
Buying during major corrections (>20%):
Investors wait for significant corrections to buy Bitcoin at lower prices.
Pros: Reduced risk when buying near the bottom of large corrections.
Cons: Requires patience, and there's no guarantee that prices will drop significantly.
2. Could Bitcoin Revisit the $75k-$85k Range?
Liquidity Gap ($75k-$85k):
Market data shows this range has very little liquidity as Bitcoin rose too quickly, leaving minimal accumulation.
This means the $75k-$85k range is a high-risk area with weak support if prices reverse.
CME Futures Gap:
On CME Futures, this range has created a price gap, and historically, Bitcoin prices tend to fill these gaps over time.
Probability:
Based on historical market behavior, there’s roughly a 50% chance that Bitcoin could experience a significant correction and revisit this range.
3. Market Psychology During Bull Runs
During growth phases, $BTC ’s price can rise irrationally, breaking through expectations. Similarly, in bear markets, prices can drop to levels that few anticipate. Therefore:
The gap in the $75k-$85k range might be ignored during this bull run.
The gap could only be filled during the next downtrend cycle, when Bitcoin finishes its bullish phase and begins its correction.
If that happens, the $75k-$85k range could potentially become the bottom of the next bear market.
4. Conclusion
There is no single "best" strategy; each strategy works better and is more suitable for different circumstances, and all come with their own risks.
Note, this article is for informational purposes only and is not financial advice. The crypto market is highly volatile and risky, and investors should carefully evaluate their risk tolerance before making decisions.
Remember, investing in Bitcoin isn’t just about short-term gains; it’s about believing in its long-term potential. Those who remain disciplined and patient are likely to reap the rewards in the future.