Best Time To Buy Crypto: Market Timing vs Dollar Cost Averaging

Crypto market timing, liquid loans, dollar cost averaging

When Should You Buy Crypto?

What does the perfect entry strategy look like?

  • Buying at the cheapest price without watching the trend
  • Buying because it’s moving up
  • Buying because of someone’s bullish predictions
  • Buying because the project is undervalued (based on fundamental analysis)
  • Buying because you believe it will go parabolic someday

Does Market Timing Work?

When well-executed, market timing can grow your portfolio overnight, even with the worst cryptocurrencies. High-risk goes hand-in-hand with these rewards, which is why this strategy is never recommended. It may work for experienced traders, but does that mean you should do it?

  • Buying large-cap coins to reduce volatility (e.g., Ethereum instead of Polygon)
  • Timing large market trends rather than quick pumps (e.g., Bitcoin’s next halving vs Elon Musk tweets)
  • Buying in downtrends with little to no bearish indicators

Market Timing vs Time in the Market

The opposite of market timing is time in the market. Except for one thing in common: patience. Respectively, before and after buying cryptocurrencies.

  • Would you rather wait to buy or to sell?
  • Is cryptocurrency working for you?
  • What’s your risk tolerance?

Why Dollar Cost Averaging (DCA) is the Best Investment Strategy

Both market timing and holding are overwhelming decisions. Even after you’ve bought, you’re worrying about what Bitcoin is doing. The emotional attachment can make you second guess and make costly mistakes.

  • Month 1 to 5: PLS costs $0.50. Buy 2000 coins per month (10,000 total)
  • Month 6 to 10: PLS costs $1. Buy 1000 per month (5,000 total)

Best Time To Buy Crypto: The Verdict

The best time to buy crypto is near the bottom before the end of a downtrend, assuming the project has a strong use-case and history length. Since timing an all-time-low is nearly impossible, a way not to miss it is Dollar-Cost Averaging. And if you’re worried about buying too high, there’s a better way.

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