Quote from: Ratimov on July 05, 2022, 05:22:28 PM

Quote from: dragonvslinux on July 04, 2022, 10:40:19 PM

While I agree that DCA in a dip is one of the best strategies, it's worth remembering it only works in long-term up trends, as is the case with all DCA in all assets. Below $8.3K for example, the average price of Bitcoin since 2010, this becomes debatable if Bitcoin is still in a long-term uptrend, as DCA effectively fails in the short-term. This is why there will be others who will wait for a confirmation of a low, or least a high probability that a low has been reached, as if worse case scenario Bitcoin goes much lower than most people expect is possible, they will be in a position to BTC at much lower prices, at a much later date.

Hence, the only issue with averaging between $10K and $20K, is assuming $10K will be the low. As if it's not, a $15K average won't seem like a great price if a longer-term bear market begins. I'm not even suggesting this is a likelihood right now, but only outlining that it remains a possibility (as it has always been for a decade now), but more so that there will be investors who will remain on the sidelines because they'd much prefer to buy Bitcoin 20% up from the lows, even 50% or 100%, if there is a much better confirmation of a trend reversal - knowing that they could still end up buying below $15K (even if unlikely).

In reality, a multi-decade averaging plan should include buying Bitcoin from $20K to $1, as opposed to limiting the lowest buying price to a level that seems likely for a low.

Of course, all this is not designed for a speculative strategy for making quick profits, but for a measured HODL that will last for more than one year. In practice, this is a less risky way to invest than trying to bottom or squeeze to try to buy quickly at the very bottom. As far as a $20,000 to $1 purchase plan is concerned, you should have ongoing collateral for this unlikely scenario. But what's the point of holding free money to buy back bitcoins at prices that, with a 99.99% probability, will not happen? Bitcoin has a historical bullish chart that has not broken yet, it makes sense to expand the buying range if the historical chart breaks.

I agree it's not about timing the bottom when investing, quite the opposite. I'm just pointing how attempting to buy into confirmation of a bottom, or DCA into a dip, can both be failed strategies in the long-term. Namely if a decade long uptrend is in fact broken. Call me a pessimistic, but I'm just trying to be a realistic here. No strategy that's based on speculation (DCA included) is entirely reliable, nor the best for that matter.

For example the issue with expanding the buying range that I can see is if Bitcoin breaks it's historically bullish chart, say sub $10K, then this is a case of hindsight. If you've already laddered into the dip between $10K and $20K (based on speculating that this will be the lows) with the majority of available cash flow for example, then it's obviously not possible to retrospectively ladder in further buys at much lower prices.

For example I'll estimate there's a 90% chance $10K isn't significantly broken and 99% that $1K isn't significantly broken. But at the same time, even with a theoretical 10% chance $10K will be broken, ie 1 in every 10 times, then it's much more likely it'd be broken if there is a global recession or form of depression that we haven't seen in over a decade. That could be one of those times in 10 year such a low would occur. Likewise, if it's the worst recession in over a century, then I can definitely see how $1K would be broken. At this point, many would finally accept how DCA is speculative.

My point is, trying to buy the bottom, trying to buy confirmation or a bottom, and DCA between particular price points (not the entire range) are all forms of speculation at the end of the day. Some come with more risk, others come with different risk, DCA is arguably one of the lowest risks (as you're buying time not price) - but even speculating on time is speculation none the less.