Example:
Person buys x amount of Bitcoin at $500
The price of Bitcoin then goes up to $550, and the person sells a percentage, and reinvests the earnings (now the person has X + earnings in Bitcoin)
Then, the price of Bitcoin goes down to $440, so the person buys more Bitcoin
then the price goes back up, and the person sells some and reinvests.
I don't understand the part about selling some of your holdings at $550 and then ... buying it back?
I think what you are proposing is a variation of rpietila's Sane and Simple Savings plan (SSS). He proposes selling 10% every time the price goes up 100%.
My own plan is more like yours. I sell 2% of my total holdings every time the price goes up 20%, and I buy 2% every time the price drops by 20%. The goal is to lower risk as the price rises and to take advantage of price swings. It assumes that the price will go up in the long run, of course.
Here are the specifics assuming I own 21 BTC @ $100:
| Price | Holdings | Value | Income |
| $100 | 21.00 | $2,100 | $0 |
| $120 | 20.58 | $2,470 | $50 |
| $144 | 20.17 | $2,904 | $59 |
| $173 | 19.77 | $3,415 | $70 |
| $207 | 19.37 | $4,017 | $82 |
| $249 | 18.98 | $4,723 | $96 |
| $299 | 18.60 | $5,555 | $113 |
| $358 | 18.23 | $6,532 | $133 |
| $430 | 17.87 | $7,682 | $157 |
| $516 | 17.51 | $9,034 | $184 |
| $619 | 17.16 | $10,624 | $217 |
| $743 | 16.82 | $12,494 | $255 |
| $892 | 16.48 | $14,693 | $300 |
| $1,070 | 16.15 | $17,279 | $353 |
