So you basically want to sell for fiat and then if bitcoin goes lower you buy it back. You use the same amount of fiat but you buy more bitcoin because its cheaper. Sure this is a great way of doing things as long as we are in a bull market. But what will you do if you sell, and the price keeps going higher and higher? Or you sell and it goes lower and lower?
Best is just to hodl if you think it has more growth long term. This type of scalp trading never works out. Especially for new traders. You might get lucky once or twice and get a better average of your bitcoin holdings but eventually you will sell at the wrong time and buy at the wrong time.
The method sounds very profitable in theory but in practical it's not quite easy, because as you said, what if you convert your Bitcoin to stablecoins and price keeps going higher, that means that you're not going to miss out on the increased price profits, but I guess the method will be more profitable if price keeps dipping, because when you sale you'll have more Bitcoin. If it's an investor that's holding the Bitcoin, for long term purpose, then it's better just hodl the Bitcoin, knowing that on the long run, the price will always hit new ATH.