See More

Dollar-Cost Averaging for Bitcoin: Is $120,000 Coming Soon?

2 mins
Updated by boris.babichev
Join our Trading Community on Telegram

In Brief

  • Bitcoin (BTC) is in a phase of re-accumulation and correction ahead of the April halving.
  • According to the cyclicality hypothesis, the market currently offers the best 90-day window for dollar cost averaging (DCA).
  • After halving, Bitcoin may begin a parabolic surge that will lead to a new all-time high (ATH) at $120,000.
  • promo

Time is running out until Bitcoin’s fourth halving. As early as April 2024, there will be a reduction in the reward for miners from 6.25 BTC to 3.125 BTC for mining a block. According to some analysts of the cryptocurrency market, the current period is the best time to accumulate and use the strategy of dollar cost averaging (DCA).

Moreover, if history rhymes and the supply shock affects the economics and valuation of Bitcoin again, the largest cryptocurrency could soon experience a parabolic surge. Typically, periods of 12-18 months after a halving have been characterized by a large appreciation in the BTC price.

$120,000 Bitcoin at Peak of Upcoming Bull Market

Renowned cryptocurrency market analyst @Negentropic_ published his macro technical analysis of the BTC price chart on X. At the beginning, he referenced a quote from Mark Twain that is well-known in the cryptocurrency world: “History does not repeat itself – but it often rhymes.”

This saying, in relation to traditional financial markets and cryptocurrencies, points to their cyclical and fractal nature. While many of the determinants of an asset’s price differ in successive eras of its trading history, very similar macroscopic price patterns can often be identified.

@Negentropic_ points to one pattern he has noticed in 3 consecutive Bitcoin cycles. Namely, in his view, in 2017, 2020, and currently, Bitcoin underwent a similar correction in the form of a bull flag. These corrections were relatively small and, at the same time, were the last opportunity to buy BTC before the parabolic surge that followed.

BTC price chart
BTC price chart / Source: X

The analyst uses the external Fib retracement to establish a potential target for Bitcoin’s increase in the current cycle. He observed that in both previous cycles, the bull market peak was reached at the 6,618 Fib extension. Thus, if history were to rhyme, the $120,000 level would provide a target for the BTC price.

90 Days to Halving is the Best Time for DCA

Regardless of the detailed prediction of the Bitcoin price at the peak of the coming bull market, it seems that the current correction could be an excellent buying opportunity. Another analyst, @therationalroot, argues that the period of around three months before halving represents the best opportunity to use a dollar-cost averaging (DCA) strategy.

He uses his circular chart of Bitcoin cycles to determine this optimal period to buy BTC. It turns out that historically, it is the last 89 before halving that have been the best opportunity to use DCA (orange area). According to the latest data, Bitcoin’s halving will occur on April 18, 2024 – or 83 days from now. The analyst states:

“Those adopting an 89-day DCA, even at the least opportune moment, were in profit within 3 years!”

BTC 89-Day period to Dollar-cost average
89-day period for DCA / Source: X

Just to be safe, @therationalroot adds that “historical performance doesn’t assure future results.” Therefore, even as the history and cyclicality of the Bitcoin price rhyme, an alternative scenario or a totally unpredictable black swan-style market structure is always possible.

For BeInCrypto’s latest crypto market analysis, click here.

Top crypto projects in the US | April 2024

Trusted

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Jakub-Dziadkowiec.png
Jakub Dziadkowiec
PhD and an assistant professor at an international university in Lublin, Poland. Spent 10 years studying philosophy of nature and sport science. An author of 4 books and two dozens of scientific articles. Now, he is using his mind for the benefits of the cryptocommunity. Technical analysis enthusiast, Bitcoin warrior, and a strong supporter of the idea of decentralization. Duc in altum!
READ FULL BIO
Sponsored
Sponsored