DCA vs Zone Specific Strategies While Accumulation of Bitcoins

[MCUKing]

Background

Hi fellows, As we all know there are different zones in the Bitcoin market cycle, and those who fill their bags for a single cycle or take an interest in multi-cycle accumulation considering Bitcoin's future potential, just need to be aware of the market zones and effective acclamation strategies as here in this post I'm trying to express what I've learned in a couple of months about the Bitcoin's market cycle and by expressing my thoughts I would like to seek guidance from seniors that what they think about am I on right track or not.

Edit:Changed the Subject to testing the desired feedback scenarios, As I was expecting a discussion on the different strategies not praising the DCA.
Introduction to Bitcoin Cycle Zones


Taking market zone to be covered in the same post, I do acknowledge maximum of the fellows already know but for those newbies like me, it will be easy to understand. The Bitcoin market cycle is based on 4 significant zones, Accumulation, Distribution, Markup (Bull Run), and Markdown (Bear Market). Considering important factors, I will try to be more significant in strategies rather than putting redundant information.

Accumulation Zone & Strategies to Follow


First of all, starting from the accumulation zone, in this market zone, whales and investors accumulate Bitcoins taking the realized undervalued market price, In simple accumulation zone is the most suited zone to invest in Bitcoin where the market price of Bitcoin goes lower than the realized bitcoin price.

For the rest, I think the topic is getting lengthened..

In this particular zone, a few more prominent Strategies can be taken for effective Bitcoin accumulation.

Strict DCA: DCA is the most recognized accumulation strategy used by the Bit-coiners to fill up their bags, many different types of DCA exist but here in the accumulation zone investors should prefer the Strict DCA on a particular time span and specific amount on each interval. Smart people consciously use this zone to boost their returns with good decisions but a few newbies and other investors try to wait for the Bottom, which can lead to FOMO later on, by adopting DCA in this zone a much more effective investment can be made as no one can speculation bottom accurately.

Use Limit Buying Orders: You can use the limit order, prepare a long-term buying analysis, and place equal buying orders on the different market support levels, this will greatly help in the volatility, in the accumulation zone compared to the other zones volatility remains constant (Consolidating market), still in case it will help you in decent buying prices.

Try to Avoid FOMO: In the accumulation zone on the initial stage and ending stage of the zone most people fall into the FOMO, better to control their emotions, be conscious while making any decision as it will directly affect your accumulation process, take a close look on the market sentiments and plan accordingly your next buying range & capital of that range to be invested.

Prepare the Emergency Funds:


I was not aware of it firstly while exploring the forum, in the Buy&Hold with a discussion between seniors and JJG, still need to be more familiar with this strategy but what I've learned is this amount should be in the stable currency from which medium you can utilize it in any sort of unexpected market momentum. I'd like to ask here what seniors think about this.

Distribution Zone & Strategies to Follow


The distribution zone in the Bitcoin's market cycle is the profit booking zone for the short-term investors who accumulated Bitcoins earlier in the Bear market  & accumulation zone. Here the accumulation does matter for those who are expecting their entry in the market for  2 or 3 cycles or even more. Even in the distribution zone, these Bit coiners accumulate Bitcoins but at a lower rate. Most people don't prefer accumulation here but still, those who are dedicated to Bitcoin or any other narrative (to avoid inflation, Saving mode, etc) do accumulate Bitcoins.

Hybrid DCA: DCA can be an all-rounder for you if you are making entries for a longer period regardless of the market cycle, in the distribution zone you can accumulate by just making a few changes in the DCA, considering market sentiments and changing your interval accordingly the same thing can be done with the capital amount to be invested in the particular entry.

Use Bots: You can use the Bots with a tight range with your buying orders, It's quite similar to the limit orders but here while the market stays consistent and shows lower volatility Bots can really help in effective average buying.

Be Patient and Depends on TA: In the distribution zone, all you need is patience, while taking regular entries control your emotions of greed and fear, do not fall into any traps, and take entries strictly to the Technical analysis to ensure efficient buying prices. Consider most of your entries in the correction times.

Markup & Markdown Zone & Strategies to Follow


In the markup and markdown zone, the whole game revolves around the sentiments, you need to be psychologically stronger and be confident with emotions. In both of these zones, volatility shows its game and tries to manipulate the weak hands and maximum of them really fall into their hands.

Fear & Greed Index: Market sentiments are important in these zones and fear and greed indicators can really help while considering the entry times. Fear and greed really help in the accumulation, especially in the Bear Zone, you can use it for your strategy analysis in the Bull Run as well.

Buy Dips Aggressively: Dips are the opportunities, I would say buying dips alone can also be a good accumulation strategy in the Bear market even in the Bull run dips bring a lot of accumulation efficiently. Dips + DCA can be deadly   accumulation combo in the bear trend. patience is the Key.

HODL: Hodl is a complete mind game, not only accumulation is important is more important to stick to it, and HODL should be your pure mindset while accumulating for even a single cycle or for the multicycle. I would recommend reading this thread to know more about the Hodl. HODL is purely a mental challenge

That's all I think, the topic is getting overlengthen.

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[tranthidung]

To accumulate Bitcoin better, you must have good finance and good personal financial management for yourself, your family and your investment. Your investment should come to like your last priority because you and your family must survive, live well first.

If you have good job(s), good income, you can have more source of capital for investment after using part of your income for necessary expense and surely have money for emergency.

After you have fund, best strategy is Dollar Cost Averaging (DCA) with which you will make accumulation without emotion and you will be less affected by psychology cycle of market.

• Psychology of a market cycle.
• Dollar Cost Averaging Bitcoin

[Sim_card]

OP, you have done well to bring up this information here and it will really help newbies and those who haven't bought bitcoin yet. I will prefer the regular DCA method because this is the best way one can keep on accumulating more bitcoin, in order to increase his bitcoin portfolio gradually. DCA doesn't bother about the price of bitcoin at that moment either it is pumping or dumping because it is a continuous process and you are investing for a long period of time, maybe 8-10 years. Buying at the dip is also good but the disadvantage is that one have to wait till the price dips and at that time you might have spent the funds that you budgeted down for buying at the dip, which will lead to regrets at the end of the day. What matters is for you to have a proper plan of amount that you will assign for regular DCA based on your income. DCA approach is the best strategy for beginners, but if you have accumulated up to your target amount of bitcoin, then you can consider buying at the dip as a good strategy. Patience is the key to long term investment and DCA helps you accumulate with ease.

[Maus0728]

Simply stack Bitcoin if you have the means to do so.

I mean, paying yourself first, which includes setting aside a fixed amount of money to buy Bitcoin, works like a charm for me regardless of the market conditions. In my case, every time I win an art contest, receive my signature campaign payout, receive my monthly salary, or get paid for some freelance commissioned artworks, I make sure that every penny that fills my wallet automatically increases my Bitcoin stash.

No chart or any sort of noise. Just following a strict budgeting religiously.

[cheezcarls]

To accumulate Bitcoin better, you must have good finance and good personal financial management for yourself, your family and your investment. Your investment should come to like your last priority because you and your family must survive, live well first.

If you have good job(s), good income, you can have more source of capital for investment after using part of your income for necessary expense and surely have money for emergency.

After you have fund, best strategy is Dollar Cost Averaging (DCA) with which you will make accumulation without emotion and you will be less affected by psychology cycle of market.

• Psychology of a market cycle.
• Dollar Cost Averaging Bitcoin

Exactly right on point. It is my mindset when I started doing the DCA (dollar-cost averaging) mid-last year regardless of the market condition, cycle, etc. I honestly have less belief in “cycles” in which anything can change unexpectedly without warning.

This is why even if BTC went downhill last time, I was not concerned that much and I just kept on doing DCA. I always make sure that the money I’ve saved for family and emergency is my top priority and investments are at the very least in the priority list.

It is important about educating ourselves with the right mindset and approach when it comes to money management and financial situations regardless if we’re single or having our own families.  

[MainIbem]

To accumulate Bitcoin better, you must have good finance and good personal financial management for yourself, your family and your investment. Your investment should come to like your last priority because you and your family must survive, live well first.

If you have good job(s), good income, you can have more source of capital for investment after using part of your income for necessary expense and surely have money for emergency.

After you have fund, best strategy is Dollar Cost Averaging (DCA) with which you will make accumulation without emotion and you will be less affected by psychology cycle of market.

• Psychology of a market cycle.
• Dollar Cost Averaging Bitcoin

You just said it all because most of the people who go Into DCA'ing doesn't really know they needs additional source of income to be able to withstand their family pressure and even though one must invest, it should be a moving business is there to take absolute care of the family and family needs to relief oneself from financial stress. Most times DCA'ing mostly good when there is a reserved funds which one can used for as backup funds to cover up every expenses without dipping hands into the investment during the DCA period.

[Aanuoluwatofunmi]

We can always invest in bitcoin for any reason as far as we have the endurance to wait patiently to see the harvest of what we have invested come to pass, this now have to be under our own personal discretion to see if we are going for a particular aspect that warrant for such or not, some are short time traders and we know while others are long time investors who don't mind leaving their bitcoin for a longer period of time, they don't mind buying at any time since they know that it will take them time before they will be able to release.

[BIT-BENDER]

First to accumulating Bitcoin you have to look at the benefits and the rewards, it's not profitable to accumulate Bitcoin and then lose it to scammers or hackers so you ought to protect your funds no matter the amount of Bitcoin you can afford.

Firstly you can buy Bitcoin from centralized and decentralized exchange but personally I choose to buy from decentralized exchange because it protects my anonymity and other benefits.
But below is a list if decentralized exchange and centralized exchanges
https://bitcointalk.org/index.php?topic=2906237.msg29885570#msg29885570

Also never leave your funds in an exchange that's why you need to have a personal wallet, I use cold storage wallet to save my Bitcoin because it's offline and more secured.

You can use this for educational tool about cool wallet setup.
https://electrum.readthedocs.io/en/latest/coldstorage.html

Security is very important, and how much or how to accumulate should not be complicated, always use yourself as the main subject you know what you can sustain a living with and what you can save up, so work with your income and as time goes you should grow.

[Zaguru12]

Security is very important, and how much or how to accumulate should not be complicated, always use yourself as the main subject you know what you can sustain a living with and what you can save up, so work with your income and as time goes you should grow.

This is actually the core point before one should go into bitcoin accumulation, the security of ones funds and this is done by the way you treat your wallet seeds phrases or keys. The key thing is setting this wallet up by yourself and not trusting third parties to do it for you even if it is some you trust. For someone going into a long term hodling the best thing should be the user of offline wallets like hardware wallets. Although it is a bit complicated but a multi sig wallet is one of the most secured with at least two co-signers, but this should be done on different to avoid a single point of failure associated with the use of master seed.

While considering the amount to invest, one should set out just an amount considerably you can lose. My take of at least 20% of your income is wise but one can go higher if they have the funds

[BitcoinPanther]

Nothing beats a perfect trading when it comes to most effective Bitcoin accumulation, but the problem is the timing.  People never know when will be the next dip to buy Bitcoin and when will be the next surge to sell BTC and not get burn due to miscalculation

Instead,  more people go for hodl in order to save themselves from the troubles of daily volatility of Bitcoin market.  Aside from that long term holding also save investors from rigorous calculation an chart reading which at the end the prediction created is still not 100% to happen.

[Sophokles]

The simple solution we have in this scenario is DCA as OP mentioned already. Another thing to keep in mind is that we need to have basic knowledge about finance and money management. Your monthly expenses and how much money you are going to save in bitcoin need to be adjusted correctly. Because in case of any emergency you might need some extra money...You need to have a plan for how you will face this situation. Investing in bitcoin with monthly savings and selling it in an emergency can be a bad habit if you want to hold bitcoin for the long term.

[Hamza2424]

The simple solution we have in this scenario is DCA as OP mentioned already. Another thing to keep in mind is that we need to have basic knowledge about finance and money management. Your monthly expenses and how much money you are going to save in bitcoin need to be adjusted correctly. Because in case of any emergency you might need some extra money...You need to have a plan for how you will face this situation. Investing in bitcoin with monthly savings and selling it in an emergency can be a bad habit if you want to hold bitcoin for the long term.

Investment without a proper plan & strategy execution is worthless and inefficient. The time we spent a couple of months from April to October was the best accumulation zone entry, now from here the markup entry will start and many will lose patience and in FOMO they will hit their badly.

As OP mentioned in any zone patience is the key, well personally I do agree that DCA is an all-rounder but in the Distribution and Markup zone hybrid DCA type of strategy with lupms and sums can be more efficient. OP made a very good start in covering most of the strategies with their best fitting but due to the lack of experience, I think a couple of more things left over way a decent work done by OP I would like to call over a topic where I had discussed the accumulation.

☑ Things to keep in mind before accumulation of Bitcoin

Besides that multi-cycle accumulation requires very detailed analysis before jumping into the accumulation, a couple of things must be taken into account if you are going in multi-cycle it is a multicycle for others for you consider it a single cycle of longer duration, where you'll get more back to back accumulation zones and never miss out this particular zone for a good accumulation. It can be even more efficient in buying compared to the Bear market.

[nelson4lov]

Bitcoin Accumulation is dead simple if the simple dollar cost averaging strategy is employed. In the early days, the phrase "Buy low, sell high" resonated with the community. I don't see it being used much today but the key takeaway is to simply be patience and whenever the market presents an opportunity and there's a sell-off, the goal is to buy as much as your current budget allows. It's that simple in my opinion.

For users that want a more systematic approach that could lead to a slightly better result, then OP's content about market zones will come in handy.  Personally, I've made my mistakes in the past but right now, I try to live a very simple life.

Bitcoin goes down, I press buy button.

[Sophokles]

now from here the markup entry will start and many will lose patience and in FOMO they will hit their badly.

I still believe we won't see the FOMO before the approval of the bitcoin ETF in the next year. If this prediction becomes true then we have a few months of accumulation zone and we might now see this level ever again in the future.

well personally I do agree that DCA is an all-rounder but in the Distribution and Markup zone hybrid DCA type of strategy with lupms and sums can be more efficient.

You can call it by a fancy name but all of them follow the basic DCA strategy which is buying bitcoin at regular intervals. Being consistent in your intervals is important because you need to make a habit of it. You can include a few more steps to make your investment efficient but the difference won't be too much.

[Faisal2202]

The distribution zone in the Bitcoin's market cycle is the profit booking zone for the short-term investors who accumulated Bitcoins earlier in the Bear market  & accumulation zone.

First i thought accumulation is done for the long term holding. For example if i am accumulating btc then i will or shall have a plan to when i will book the profit. Generally I will say, I would hold btc for ath that comes after halving and that time depends and is not specified.

Now i need some clarifications from you that, you said, distribution zone is for booking profit from the accumulation that you had did but for the short term investors. But i would say anyone who have accumulated the BTC and are trying to book the profit in ath then they might not be considered as short term investors. Because they are at least holding the funds for 1 year and must be consider as holder (long term) I might be wrong here that's why i am asking you to please simplify it for me.

And do you know something about A/D indicator because if you are talking about accumulation and distribution then a little talk will worth it but otherwise. I also not know about A/D indicator that much just trying to get some more idea from you.

PS: BTW a nice compilation, i really like your post and keep coming with such topics.

[armanda90]

Regarding with good finance and have many passive income way seems not problem for accumulating bitcoin despite on market green or red, but difficult to manage with having trouble finance spend our salary for accumulating bitcoin exactly when higher price. Need stable of financial condition to get comfortable accumulate or invest in bitcoin what ever condition or market seems not problem when have much saving use for investing in bitcoin.
But your ideas is good and adopted well not only for investor with stable financial condition but also for every one still not get dependent with their financial condition and should manage well for accumulating bitcoin from their salary payment.

[Bananington]

With your careful analysis, what I deduse is that, anyone who has taken out time to understand market trends and movements will be able to instinctively accumulate BTC with the determination and discipline to know the right percentage to invest and the percentage to keep aside.
A trader who knows when to set aside a portion of their gains from trading, will always have more to reinvest, paybills and save.

Also, anyone who invest in BTC as a passive income is sure to have another job that pays the bills and afford some necessities, otherwise as a single source of income, it might be difficult to save up or DCA when the market starts having its volatile moments.

[DaNNy001]

Also, anyone who invest in BTC as a passive income is sure to have another job that pays the bills and afford some necessities, otherwise as a single source of income, it might be difficult to save up or DCA when the market starts having its volatile moments.

That's true because you, having, only one means of income and wanting to save and buy Bitcoin from that same income will and can make you frustrated because it's from that same place and money that you will use to cater for the needs of your daily life.
An investment in Bitcoin is very good and lucrative but if it isn't well planed it will well lead to economic frustration and confusion because you actually can't save money and will not be willing to touch or use it when you are in need to handle the issue.

[Don Pedro Dinero]

Simply stack Bitcoin if you have the means to do so.

I mean, paying yourself first, which includes setting aside a fixed amount of money to buy Bitcoin, works like a charm for me regardless of the market conditions. In my case, every time I win an art contest, receive my signature campaign payout, receive my monthly salary, or get paid for some freelance commissioned artworks, I make sure that every penny that fills my wallet automatically increases my Bitcoin stash.

No chart or any sort of noise. Just following a strict budgeting religiously.

I fully agree with this. Although the OP's advice is not bad and he talks about DCA, what happens is that in a sophisticated way he also recommends accumulating more in the low phases of the market, which is fine but it also means to time the market.

As a summary, for those who don't have much of an idea and don't want too much trouble, just do strict DCA. For people with more experience and knowledge, the advice of the OP can be useful.

[mindrust]

Strict DCA is the best. Just keep buying in any market condition. You shouldn’t modify your original investment plan though. For example, you decided to buy $200 worth of btc every week. You should do this no matter what the markets do. You shouldn’t buy more when the markets are down or buy less when the markets are up because that would be “timing the markets”. Remember, DCA isn’t about timing the markets. It is about being the market. If you do this for a long time, you will minimize your risk of losing money.

You may make more money if you go with the other route. (Timing the markets) But that requires financial education. You need to make the right guesses. DCA’ing is way easier and anybody can do it.