If you’re a HODLER type, then it might not really matter much as long as you believe that Bitcoin will someday operate as a common currency and that you have the capital means to make such a purchase.
But if you want to be more discriminate as to timing your BTC buys, then you might benefit from a few technical rules to help you enter positions for a currency whose “fundamentals” may not be as cut-and-dry as most other financial assets.
Let’s take a closer look at the current price situation:
The April 6 low at (1) established a support line above which price broke out from its steep correction. We are currently testing that support line, perhaps even slightly exceeding it on the downside.
So with regard to making an entry, buying BTC now would constitute a semi-aggressive buying point, if only because there is no technical or fundamental data to indicate that BTC will reverse to the upside.
If you enter now and are wrong, then price can decline to the next big support point at (3). That too would make for an aggressive entry for reasons similar to buying BTC now.
A less aggressive entry, though not less risky, is to buy BTC if price exceeds the last swing high point at (2). In favor of this buy point is the potential indication that a break above this level may indicate a possible upward reversal. The unfavorable scenario is that if price continues to move downward, there is quite a distance that the decline can cover at points (1), (3), and even (6).
So, if you require a potential uptrend indication—again, this can also carry significant downward risk—you would wait for price to break above previous swing highs at (2), (4), and (5).
Entry points at (1), (3), and (6) may appear more favorable since you would be buying at support, BUT to buy at those points would be to buy without any uptrend indication at all, making such entry points highly aggressive.
In the end, your risk tolerance and risk capital should help you determine what you may or may not be capable of doing when it comes to this speculative asset.
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