One month ago, I posted that we had reached the lowest RSI level in a decade. I indicated this was the beginning of the most ideal time to DCA.
The original post is still up.
Many people thought this was a decent analysis. Many thought it was rubbish. Some people call TA garbage. Make up your own mind, I don’t really care either way. This is just what I’m doing.
Timing the bottom is near impossible, but more than that, it is almost pointless. If you’re buying to hold long enough to see a 5x rise, then nailing the bottom is irrelevant.
Let’s examine the two cases of DCA for the last month versus nailing the bottom of $17,500. If you bought Bitcoin weekly for the last month, your average buy price would be about $20,500.
Assuming you hold long enough for Bitcoin to reach $100k, your gain from the bottom is 470%. Selling from DCA entry, would still yield 390%. Is that really worth the stress? Or is it just being greedy?
As I stated in my original post:
In 2011, just two years after the birth of Bitcoin, the weekly RSI was at 21. The price of bitcoin was $2.
In January 2015, it hit 27. Price was $154.
In December 2019, it hit 29. Price was $3150.
These levels are all textbook oversold values. In the past, every single time it hit these condition levels, it went back to 50 points over the next ~6 months, and hovered around that price for most of that time. After that, it has never again returned to those prices.
Right now, it is at 26, and this is the most oversold it has been in 11 years.
The current weekly RSI is still at 25. It’s still the lowest in over a decade.
So why am mentioning this? Because there is still time. I beleive we have reached an optimal DCA range, and I beleive it could last until October, possibly as long as Christmas. Best of luck to anyone who attempts to nail the absolute bottom, I actually hope you can manage it. But for those of us, who just don’t have the time to watch charts 24/7, DCA is the best strategy, we still have a couple of months left, and I am in peak accumulation mode.
EDIT: LOL 30 downvotes in 30 minutes, despite being 100% correct this time, people really hate TA.