In their short lifespan bitcoins have proven to be one of the best assets on the market of 2023. A lot of people have made a fortune out of bitcoin mining and bitcoin trading. Just like any other trading, the main goal while trading bitcoins is to buy at the minimum price and to make the maximum profit possible. So, the trick in bitcoin trading is to control your risk and make it as minimal as possible also to increase the upside potential.
In bitcoin mining, the timing matters the most. In easier terms, there are some phases when the bitcoin market holds the highest probabilities to go upwards and bring you higher reward. Now, one thing to note here is that there is no fixed theory to follow while trading bitcoins. First of all, all the trading markets fluctuate very often, and secondly, the bitcoin market is fairly new as they are in trading just for a bit over 10 years. While working with bitcoins you will have to look for the probabilities; so, here are some tips on how to find out the best possible phase when bitcoin buying can prove to be most beneficial.
Step 1: Look for price crashes over 80% from prior highs.
Step 2: Look for a price stabilizing point.
Step 3: Look for price flat lines for 3 to 9 months.
There are some points when the prices crash over 80% of their prior high prices. Those are simply the point when people start buying bitcoins in frenzy. But you also have to look for a price stabilizing point on which the prices stay around a stable price range. The next point you should look for is a time period when the price was relatively flat for at least 3 to 9 months.
According to the researches, all the price hikes came after these three basic steps. If you analyze the bitcoin market you can see the same result. But the reason that makes these accumulation points make the risk to reward ratio is a psychological effect. People usually buy bitcoins when everyone else is buying, because those are the points when there is so much positivity going around and people feel easier to believe in that vibe. Whenever there is a sudden fall in bitcoin prices generally most people would stop buying them and some would also start to trade their bitcoins to avoid further losses. This mathematically gives a higher probability for a risk to reward ratio. Following these three simple steps you can easily find out the best possible times to buy bitcoins as you will be buying at a low price at the chances for a greater profit is very high.
There is also some other good times when buying bitcoins can be profitable for you. Remember, those might not be the best time but, as everyone wants to trade bitcoins and not many people have the patience to wait for the perfect moment, these timings can also help you to gain a good amount of profit. The first one on that list is looking at the yearly lows. If you look at the yearly low prices of bitcoins over the past ten years, you will notice that every year’s yearly low was actually higher than the previous year’s yearly low. Except for only 2015’s when the yearly low was lower than 2014’s lowest price. On the 10 yearlong market analogy experts count that as an exception rather than an example. You must remember the bitcoins trading is continuously growing and so is the price of bitcoins. When the price of bitcoins drops closer to the previous year’s yearly low probability says that is a good time to buy bitcoins. The chances are that year the price will not fall any lower and you would most likely gain profit.
Another window of opportunity is when the prices fall 50% or more than that in a few days. In other words, if the price falls very much very quickly, that is a good time to buy bitcoins. Over the past ten years whenever the bitcoin price has fallen too much in a short time, it has gone up more just after a few days. So, if you are looking for a good price to buy bitcoins and you want to minimize your risks you should have an eye open for sudden falls.
The third tip here is a very effective and one of the easiest ways to get involved in the market. Rather than a momentary fix, this one is more of a regular practice. And for this one, you should work with dollar-cost averaging. If you keep buying bitcoins for a hundred dollars each week while looking out for the daily lows and some rare price drop sessions, in two years you would have more bitcoin in your possession than you should have for the dollar you invested. The dollar-cost averaging lets you take the advantage of low-price moments over a while and gives you a better chance of increasing your total holdings, which in results gives you more bitcoins and chances of higher gains.
In a nutshell, any time can be a good time to buy bitcoins. If you want to make a profit out of bitcoins the first thing that you have to do is being on the market. Look out for more opportunities, do your daily analysis and any moment can be the moment to bring you high profits. Remember, bitcoin trading is also like any other business. So, before you enter the market you must think of a way out of it. Think of what do you want to do with your bitcoins. Do you want to trade them for more dollars or is it just an idle investment for you? While investing for bitcoins don’t just think in terms of days. Think of what your today’s investment can bring you in a long run.