Bitcoin buyers want to be sure and maximize the returns they seek from owning BTC. Here is a complete short guide for when to buy bitcoin. Making an entry into the BTC market near a cyclical high price level could risk losses or keeping your principle stuck in your holdings for longer than your ideal timeline to realize a gain. Entering before a cyclical price bottom or waiting too long after one misses an opportunity to realize more profits from your trade. Leaving your holdings for years without taking profits during market high points leaves money on the table.
A Tale of Two Crypto Investors
In 2017 Bitcoin, and consequently the alt crypto market, experienced its first sustained parabolic price increase. The new cryptographically secured and peer-to-peer cash network, and its radical price movements, garnered a wave of earned media attention and Google searches for “bitcoin,” bitcoin price,” and “is bitcoin legit?”
At the height of the euphoria, a poster on Bitcoin Reddit who was crudely exuberant about getting rich quick, announced he had mortgaged his house to buy BTC at $20,000 per coin on December 23, 2017. The following day the bubble collapsed and prices cratered, then continued rolling downhill for over a year.
Earlier that year a computer engineer from Europe decided to go back and check a computer he had set up to mine bitcoin back when nobody was talking about it, searching for it on Google, and getting out their credit card to buy it. He had installed Bitcoin Core to mine bitcoin just to tinker with it and learn about the application’s novel network architecture.
After seeing in the news headlines that the bitcoin price was exploding on crypto exchange markets, he found that he had nearly $800,000 in BTC stashed away at the exchange rate at that time. He ended up paying for a house and paying off college debts. He told reporters his fiancée stopped objecting to any of his purchases of computer equipment to tinker with.
What Is The Best Time to Buy Bitcoin?
As the two true stories above illustrate, the best time to buy bitcoin is when people are not interested and it’s a buyer’s market to purchase the scarce digital commodity at a discounted price. The best time to avoid buying bitcoin is when markets are roiling with over enthusiasm for it and fear of missing out buoys prices to unsustainable and short-lived record highs.
Timing The Market Using The Bitcoin Rainbow Chart
One way to time the bitcoin market to exchange fiat for bitcoin is using the Bitcoin Rainbow Chart. The Bitcoin Rainbow chart features a historical graph of the bitcoin price.
The graph is logarithmically scaled so that each successive layer moving up the graph shows ten times more price growth. The logarithmically scaled graph is laid out into a trendline forecasting the likely range of future bitcoin price growth until the fundamentals underlying the logarithmic growth trend change.
Over the range of fluctuating bitcoin prices, a band of Buy, Hold, and Sell recommendations is overlaid. It is color coded according to the visible spectrum band, ROY G BIV, hence the name, Bitcoin Rainbow Chart.
When to Buy Cryptocurrency and When to Sell
A good time to buy cryptocurrency in general is when you have some savings that you can live without, don’t plan spending any time soon, and are sure you won’t need for anything in the near future.
That is because of the inherent risks of investing in a liquid commodity with a history of such a volatile price range. When you’ve got that situation going on a one time or regular basis, you can think about strategizing your entry into crypto.
Find the projects you believe are most substantial in delivering a quality service that people value and have the greatest long-term prospects of adoption and use. When markets are beating up over macro conditions, industry news, and severe price corrections— that is a good time to buy.
And when people you haven’t heard from in forever message you and say, “Hey you know about cryptocurrency, have any pointers? I want to buy some,” that is a good time to sell.
What Is The Best Time to Buy Bitcoin 2022?
If you are a prospective bitcoin buyer, possibly in the market sometime soon, you may be wondering specifically what is the best time to buy bitcoin in 2022?
With a quarter left in the year, BTC traded steadily over Q3 in the range bound by the $18K – $23K level, within the $19K – $20K level most of that time. In 2018, following the same pattern, trading range bound near $6K from Aug – Nov, BTC price then collapsed in half. If that is the case, they could scoop more profits by entering at a more attractive price.
But bullish signals such as low selling pressure from long-term holders, low supply on exchanges, and unwavering interest in bitcoin by institutional investors and corporate incumbents could mean this is a consolidation phase before a rally.