BTCUSD - Where Does Someone Buy Now?

COINBASE:BTCUSD   Bitcoin / U.S. Dollar
Over the past two months have received many questions on where or when to buy Bitcoin . Some from those that are familiar with the crypto space, others completely new and never owned a crypto in their life. The real question is not when or where to buy, but what are you buying it for?

The most popular response was they are looking for a hedge against the perpetual stimulus plans, QE , and deflating Fiat currencies. Well if this is the reason you are buying into Bitcoin , buy some here and buy a little every week or paycheck. It really is that simple.

If you believe in the long viability of Bitcoin and the potential for it to hit 100k or even 1 million, the sooner you start the better. Does it matter if you bought at 12k or 24k if your long term target is 100k? Not really.

Now as excited as I am to hear the 100k-1million dollar price targets on Bitcoin , the reality is it is probably not getting there next year. Not that we don't get there eventually, but the probabilities of that happening in the next 12 months are extremely low. But if it does happen, your getting 75% off right now so why not add if you don't have any?

My point is during a bull market, participants are reluctant to jump in. It's to high, I'll wait for a pullback, yet the market continues to grind higher and if your long term targets are 400% higher, what are you waiting for? This is where risk management escapes those new to investing and many FURUs that regurgitate the hope of making 400% in a single trade.

IF I did not own any Bitcoin and I had 10k I wanted to invest, I would simply add $1500 or so here, and look to add into a pullback whether here or higher. I would also cap my buy level. Adding a "bar position" sets the bar as to where you can add. Below the bar, add more capital, above the bar, add a little less.

Say I was looking at a 3-5 year target of 100k. I would cap my purchases at about 1/3 of my target price so for this example 33k . Above 33k , I stop adding, below I buy dips. If we were to get an extreme pullback into the mid teens, I would be increasing my position size.

Simple plan, but more often than not simple plans work better than more complex ones. Yet most follow FURU's who simply promise hope and dreams and more often than not deliver crap. How many were caught up in XRP going to the moon? Many and that lost capital would have been a winner had they simply gone the long safe route.

I would save at least 50% of my cash for a broader pullback and here is why.

Right now we are entering a target area between 24 and 32k. This is likely the 3rd wave of a broader cycle that takes us to 45-60k. This is a preliminary level as we will adjust as the market plays out.

Markets generally revert to the mean trend. Right now this is within the 16-20k area so the potential for a leg 4 weeding out weak hands, (those that do not understand risk management or are just buying all in on FOMO) and providing a buying opportunity for the patient. Now what if it does not pullback that far?

Maybe it does not, but probabilities favor at least a pullback into the low 20's before the next leg higher, depending on where this cycle completes. Lets zoom in.

This was our 2nd trade signal sent out the other day, though the initial one was tapped out with the on the 21st, we still liked the consolidation, easily identifiably wave (iv) setup and jumped back in. The first target was hit which makes this a free trade at this point. The 2nd target at 29950 is a little more aggressive, but reasonable based on the weekly target areas.

The 30k level is likely going to be a psychological level and also around the 30-50% profit area off the mid term wave 3 cycle. So reasonable to see some profit taking here. The question: does this weed out weak hands creating selling momentum that takes us back into the 16-20k support zone or is there enough buying to find support in the low 20k minor support zone?

Only time will tell, but the purpose of this article is where would one buy if they are looking to add or have no position at all?

IF I had no position I would add a small starter position here, add a little more in the low 20's on any bullish reversal, but save some capital in the event we pullback to the main support zone between 16-20k.
IF I had a decent position and was looking to put to work some fresh capital I want to buy out of a support zone for a broader move now that the market has established itself. Would consider adding a position in the low 20's but would be very small, maybe 10%-20% of capital allocated, and a larger position in the 16-20k main support zone . I would save some capital for a drastic move into the lower teens, but this is likely to be short lived.

So currently I have a plan, and though the plan may change, I need to see something more than this move to just blindly add into the highs here.

As for swing trading, you are in it or you are waiting. There is really no trade setup here to go with. High risk, low return is not a good area to be taking trades. For us to be interested in another swing trade, need to see decent pullback here, to at least the low 20's. OF course the market may not provide that opportunity, so there are other setups we are interested in, none of which are present now.

Plan and Strategy:

The key to being successful is having a plan and strategy and also ignoring all the Furu's with their "big time calls". The slow road is often the least bumpy. Whether you mirror the simple strategy I mentioned above, or you create your own, having no strategy most often results in losing your ass.

The other thing that is going to lead to an ass whoppin is investing into crap alts. Keep hearing "alt bull market" is upon us. Ok then why are most alts still 50%-80% off their ATH? Those days are over IMO, and though there will be an exception or two, why risk losing more capital when the market has clearly chosen a winner?

There is never a bad time to buy a good stock or equity if you are a long term investor. Those that bought the high in 2017 are up 40% if they held, and doing much better if the dollar cost averaged in over the past couple years. The key has always been managing risk, want to have some cash to put to work on pullbacks, but exposure if the market continues to grind higher.

Hope you all had a Merry Christmas, looks like Santa brought us a nice bull rally in Bitcoin and in honesty I think the broader run has only begun. Looking to buy into any weakness.


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