Is It Too Late To Buy Bitcoin?
#bitcoin #crypto #cryptocurrencies
I explain whether its too late to buy Bitcoin. Step by Step breakdown.
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Here’s a breakdown of why I don’t think it is too late to buy Bitcoin. I’ll address this question by using a Bitcoin Investor Tool called the 200 Yearly Moving Average Multiplier. This 2Y MA multiplier consists of a 2 year moving average and a 5x multiplier of that moving average. The 2 year MA (green) showcases that whenever Bitcoin’s price breaksdown from this moving average, price enters an area of outsized returns for bargain hunters who accumulate in said area.
This area is when most investors are extremely fearful about price and where maximum pessimism towards the asset prevails. However, this area also happens to be a price region whereby the prospect of reward for a Bitcoin investment far outweighs the risk of downside. Ranging below the green line has historically precedes a financial opportunity with an excellent return on investment.
On the flip, the red line showcases a great area to take profit on a BTC investment as price reaches the peak of its bull market. This is where we observe peak greed and maximum optimism amongst BTCUSD investors. Deviating beyond this red MA precedes a sell-off. Every time Bitcoin has broken down from the green MA is when a ranging period began. I explain these ranging periods in more detail in the video but these are accumulation areas for prospective bargain hunter Bitcoin investors.
It’s important to measure the percentage of decline from this 2 year moving average to see if there are any recurring tendencies in these retraces. It turns out there are some tendencies. We tend to see a 44-54% retrace upon breakdown from the 2 year MA. If we extrapolate this finding to future price action it gives us an interesting conclusion.
That conclusion is this. Bitcoin recently retraced 46% upon breakdown from the MA, reaching $3800. This is in line with the historical 44-46% retrace that has happened in the past. It may very well be the bottom if indeed this is the sort of retracement that is to repeat. But on the flip side of that, if Bitcoin is to repeat a 53-54% correction – then the bottom isn’t in. In fact, a 53-54% correction from current prices would mean that $3800 wasn’t the bottom and that we may see levels as low $3300-$3400.
Whatever the case may be, Bitcoin is residing within an area that tends to produce outsized returns. On a micro scale, it could be that it is too late to buy bitcoin at a deep discount. However, if we zoom out and gain perspective of the macro trends, then it is not late at all to be buying Bitcoin in this historically attractive region.
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