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On the net, you can find many recommendations for crypto investors, the authors of which often say that you need to choose the right moment to enter the crypto market. The editors of BeInCrypto decided to find out how to find the most optimal time to buy cryptocurrency using the example of bitcoin, the flagship of the market, the movements of which are repeated by most other coins.
What you need to know about Bitcoin movements
The head of the largest crypto exchange Binance, Changpeng Zhao, believes that every bitcoin owner is potentially one of the richest people on the planet. Here’s what the developer’s logic looks like:
- The supply of bitcoin is limited. A total of 21 million coins will be mined. Accordingly, in theory, only a limited number of people can become owners of bitcoin or its parts.
- About once every four years, halvings occur in the cryptocurrency network. The process reduces the rate of release of bitcoins by 2 times, which contributes to the formation of a shortage of coins in the market. Changes, as history shows, have a positive effect on the value of the cryptocurrency.
The Bitcoin network has already passed 3 halvings:
- November 28, 2012.
- July 9, 2016.
- May 11, 2020.
After each of the halvings, bitcoin went into active growth against the background of the formation of a shortage of coins in the market.
Flashes of growth of bitcoin after halvings. Chart: Trading View
At the same time, after each phase of the active growth of bitcoin, as history shows, there comes a period of a protracted fall in prices – “crypto winter”. During this period of time, you can buy coins at the most attractive rate. For example, during the “crypto winter” after the 2017 halving, Bitcoin, in December 2018, BTC dropped to $3,000. Less than 3 years later, in March 2021, the coin broke through the $60,000 mark.
Information about the behavior of Bitcoin as the market leader, followed by other cryptocurrencies, and the analysis of its cycles will help us determine the best moments to enter the market.
When to buy cryptocurrency
The timing of the purchase of cryptocurrencies should depend on the goals. Let’s look at two common options.
Investments for the long term
The technical features of bitcoin, the growing interest of users in cryptocurrencies and the trend towards digitalization of the financial market suggest that in the future the coin will continue to demonstrate positive momentum. Therefore, if we are talking about long-term investments, you can buy a coin at any time. At the same time, in order to get as much benefit as possible, it is worth buying during the “crypto winter” periods.
Here is what the movement of bitcoin looks like after the halvings:
|Halving||Halving price||The start of a growth spurt||Local maximum until the next halving||Local minimum after growth flare|
|November 28, 2012.||$12||October 2013 (11 months after halving)||$1167. November 30, 2013 (367 days after halving)||$155.
January 14, 2015 (777 days post-halving)
|July 9, 2016.||$647||September 2017 (14 months after halving)||$19 678.
December 17, 2017 (526 days post-halving)
|$3121. December 15, 2018 (889 days post-halving)|
|May 11, 2020.||$8825||October 2020 (5 months after halving)||$68,789 November 10, 2021 (548 days post-halving)||?|
An analysis of the history of bitcoin movement shows that the cryptocurrency, on average, reaches a local minimum after rising against the backdrop of halving in 833 days. By this logic, investors will be able to see the lowest prices for BTC in the twentieth of August 2022.
Important! There is an opinion that bitcoin has not yet peaked in the growth cycle after the 2020 halving. The update of the peak, recorded on November 10, 2021 at a height of $68,789, may be the reason for revising the analysis of the possibilities for the further movement of the coin.
Earnings on cryptocurrency in the short term
Investors who are not focused on the long-term holding of cryptocurrencies can earn on the news. Positive newsbreaks provide significant support for bitcoin. For example, against the backdrop of the release of news about Tesla’s investment in BTC, the coin has risen in price by $10,000.
Bitcoin reacts to Tesla investment news release. Chart: Trading View
Get news about cryptocurrency, where you can profitably buy coins and earn on their growth, with the help of BeInCrypto. You can learn more about how to profit from the difference in the rate of cryptocurrency from our material.
All information contained on our website is published in good faith and objectively and for informational purposes only. The reader is solely responsible for any actions taken by him on the basis of information received on our website.
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