When is the Best Time To Buy Bitcoin?
With the recent dramatic crash in Bitcoin price, which had more or less been in the $4000 range, the questions about the new bottom for the year 2018 have surfaced. With this, a lot of first-time buyers are now interested in buying Bitcoin at these lucrative prices. But is it the right time to buy? What if it falls to $1800 in the next few months?
Such questions from first-time buyers cannot be answered with a price since no one knows what the real bottom is. But from the information that we do have, we can make a reasonable prediction about how Bitcoin can yield a good return considering capital gain is the only aim of this investor at the time. Here are some tips from our cryptocurrency trading community.
In December 2017, Bitcoin charted new highs every week until it reached the peak of $19,500. The whole of 2018, Bitcoin has been busy charting newer lows. Recent drop from $6000 range to $3000 range was not expected even by many seasoned traders. So how does anyone decide whether it is the right time to buy Bitcoin or not?
Purpose of investment
The most important thing to determine whether you should buy at this price or the next is your purpose of investment. Are you investing to make a decent profit by investing some extra funds or are you investing because you believe in the technology and expect a manifold return in a few years?
If your purpose is to capitalise on a trend, it is wise to set goals of profit-taking accordingly. If one were to advise someone who is looking for a 50% return in two years, you can blindly invest right now. Even if the price goes as low as $1800 in the short term, it will bounce back and you will take your profit when the price is in the $5000 range, which seems achievable in the next two years.
Allocation of funds
Are you investing spare change or a sizeable chunk of your wealth in this? If you are investing spare change and are not going to devote significant efforts to trade, hedge and learn about the new developments, it would be wise to just invest your funds in the most reliable project, Bitcoin and take profit stage-wise as the price surges in the next year.
However, if you are a serious investor with a sizeable chunk of funds, you should be more careful. You might want to plan an entry where a portion of funds is allocated to each support level right up to $1800 to average the buying cost. This will also mean you take profit stage-wise as the price goes up. You might also want to look for a managed crypto fund to invest in.
Outlook of investment
Are you thinking short term or long term? If you are looking at trading it short term, you need to be as close to the bottom as possible. But if your outlook is long-term — and when I say long term, it means one year to three years in crypto — you need not to find the exact bottom. You can invest right now and within two years, there will be an opportunity to take significant profits in Fiat.
What is the risk you are willing to take and what is the return that you expect? If you are looking at making 10x profits, you might want to invest in projects that have yet to achieve their potential. Mid-cap and low-cap projects have the potential to provide a 10x return but also come with the risk of losing all your funds if the company goes out of business.
If you are looking at anywhere below 100% profit, it is a really good time to invest in Bitcoin. If you are looking at a higher return in a shorter timeframe, you will need to look at other crypto tokens.
The right price to buy Bitcoin is not the same for everyone. That being said, the price in the range of $3300 to $3700 is a really good entry. Those who do not buy right now will end up with FOMO or Fear of Missing Out when Bitcoin rallies to $6000 again in the next year. The right time to buy Bitcoin is now.