Is very important to able to differentiate between Emergency funds, reserve funds and discretionary.especially when you are into bitcoin investment. They all have their roles to play when comes to investing in bitcoin , emergency funds just like the name implies is to take care of emergency like unexpected expenses, so is not for accumulating or being aggressive whenever there’s a dip that’s where reserves funds comes in , which can literally help to buy the dip while keeping pace with your normal dca method, discretionary income which plays the role of money you can spare for investing, or money you can choose to save but as an bitcoin investor is best for accumulating.
You have taken time to simplify this to a way that it will be very easy for anyone to understand. So many person do misunderstood this and they eventually exposed there assets to unanticipated risks. Emergency funds are meant for emergency and it will be wrong to tamper with it unless there is emergency. So it shouldn't be used for investing or any other purposes aside for emergency. I love the point you have made about using reserve funds for buying the dips whenever it occurs while still going on with your long term plan.
Discretionary income is also very important because it is what that is supposed to be invest in bitcoin, since bitcoin investment is not risk free so it will be unwise to invest money that we cannot afford to lose into bitcoin.