When I first got into Bitcoin, almost nobody knew anything about the industry. These days, when you walk around and ask people if they know what Bitcoin is, they not only know it but they can likely recite some party line like: "oh yeah, it's down a lot now, isn't it?"
It's funny how these party lines resonate and have a resounding impact on retail investors. Most people are stuck looking at price action and then disappear for a while. The last they heard about BTC was that it fell from $60k and is "low" and the next time they start paying attention will be when it starts getting close to $60k once again.
It's funny how that works, isn't it?
Time in the Market Over Timing the Market
Time in the market will always be superior to timing the market. Retail investors are especially delusional in thinking that they can find some kind of "edge" when looking at markets.
I can't tell you how many countless people have told me that they have some kind of indicator, bot or other piece of information that tells them what BTC or a stock price movement will occur next.
Instead of timing the market, consider how explosive your portfolio gains will be if you focus on generating more cash flow and then dollar-cost average into the markets consistently and over long time periods.
Taking a Step Back on Bitcoin
I find on-chain analytics for BTC to be quite fascinating. There are a lot of stories you can tell from the movement of Bitcoins in wallet addresses.
For example, this RHODL indicator tracks the value of BTC held in wallets. It shows the age of the coins in those wallets.
In the chart, you can see that the end of 2015 / 2016 (where it bottoms) shows a lot of coins held in wallets that were "older"... meaning that they had been held in that wallet and not moved for a while.
Then you can see in 2018/19 where the amount in new (younger) wallets peaked.
What I find interesting is the inflow and outflow of coins. What we see happening right now is that the value of coins held in older wallets peaked once again. We're starting to see the rise once again from the HODLer to the Specualtor.
This cyclical movement in coins is quite telling. It could be accurate or it could not be.
I never look at one indicator to tell me what time to get into the market. I have already decided that BTC is an asset that I want to continue dollar-cost averaging into over a long timeframe. For the next several decades, I want BTC to be a major holding in my portfolio.
Data like this can give us some indications and ideas about the future. Possible stories to tell ourselves. The story I have been thinking a lot about is when the next bull market in crypto will take us back to all-time highs.
While it does not matter much in terms of my DCA strategy, it can have a big impact on my exit strategy.
I don't sit here and try to find "the best time to buy" and "the best time to sell". Instead, I zoom out and I DCA in and then eventually DCA out.
Right now, all indicators are continuing to support my DCA In strategy.
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