In the previous article[1], we laid down the premise. In this article, we’ll be diving further to better understand when you should buy Bitcoin.
To reiterate, we’re looking at how often should you buy Bitcoin[2], based on a series of periodic moving averages. We’ve already looked at the 200-day moving average (DMA), and now we’ll scale it down to the 150DMA, 100DMA, 50DMA, and the 7DMA. Before we dive into the 150DMA, a look at the rules we’re working with,
- Date range: 1 January to 30 October
- Buy only: No indication of when to sell
- Entry and Exit: The MA will serve as a signal to enter or exit the DCA strategy
- MA only: The only indicator we’ll look at is the MA
- Fee-less: Withdrawal and order fees have not been considered
- Daily average: Average of BTC OHLC prices considered
- Bitcoin only: Only BTC buys looked at
- Zero-sum strategy: You either do something (buy) or don’t do something (don’t buy)
- Premium: Each buy is at a premium, trading with price momentum
150-day moving average
The 150DMA doesn’t rank as highly as the 200DMA, nor does it have the golden or death crossover fanfare, but is important nonetheless. This is because it marks the 5-month mark, and on longer time frames, indicates a healthy trend going forward. So, how often would you end up buying Bitcoin in 2020 using the 150DMA?
| 150DMA | Value |
| No of buys | 237 |
| Average price | $ 10,125.91 |
| Entries | 3 |
| Exit | 2 |
| Total moves | 5 |
| Price per move | $ 2,025.18 |
| Profit (against 30 October) |
33.3% |
| Profit per buy | $ 42.73 |
Similar to the 200DMA, with the 150DMA, you’d end up entering the markets on three occasions. These three occasions would total to 237 days of buying Bitcoin every day. The exits you’d
