5 Simple Strategies to Buy Bitcoin

Bitcoin has underperformed since peaking at an all-time high in November 2021. The value of bitcoin crashed from nearly $70,000 to below $18,000 as fears of a recession mounted. At the time of writing, BTC trades for around $20,000, giving it a market cap of over $377 billion.

Bitcoin has struggled as investors worry about rising interest rates, soaring inflation and the fact that governments have scaled back their fiscal stimulus. Therefore, in this article we will look at some strategies to help you decide whether or not to buy Bitcoin as it consolidates to $20,000.

Some of the strategies highlighted are the use of cryptocurrency trading robots, technical analysis and chart analysis.

1. Buy Bitcoin using technical analysis

The most common strategy for knowing when to buy Bitcoin is to use technical analysis. This is an analysis method that involves the use of technical indicators such as moving averages and Bollinger Bands.

One way to use moving averages is to find when there is a crossover between a long and a short. For example, you can have a 25-day and a 50-day moving average on a Bitcoin chart. In this case, when the two make a crossover, it could be a sign that buyers are coming back and that the coin will continue to rise.

Furthermore, you can use oscillating indicators that identify oversold and overbought levels. Examples of popular oscillators are Stochastics, Commodity Channel Index (CCI) and Relative Strength Index (RSI).

2. News and macro events

In addition, you can also decide whether to buy Bitcoin by simply looking at important macro events. For example, you can look at economic data on inflation and the labor market. In most cases, high inflation and low unemployment usually push the Federal Reserve to embrace a more hawkish monetary policy.

In most cases, an extremely hawkish Fed is pushing the prices of Bitcoin and other risky assets sharply lower. For example, Bitcoin fell sharply in 2022 as The Federal Reserve decided to hike interest rates and end its quantitative easing.

Therefore, you should always focus on the latest macro events and news from the Federal Reserve.

If the ride turns dovish, it could be a good sign to buy Bitcoin. In addition to the Fed, some fiscal policies such as stimulus packages can also have a positive impact on BTC prices. For example, Bitcoin prices spiked during the pandemic when the federal government provided trillions of dollars worth of stimulus.

3. Buy Bitcoin Using Crypto Charts

Chart analysis is another approach to deciding whether to buy Bitcoin. It is a process where you study charts and identify chart patterns. There are two main types of patterns: reversal and continuation.

Reversal chart patterns indicate that a coin’s price will change direction while continuation patterns indicate that the existing trend will continue. Examples of reversal patterns are head and shoulders, double and triple tops, and rising and falling wedges.

On the other hand, some of the most popular continuation patterns are bullish and bearish flags and cup and handle.

In addition to these, there are candlestick patterns that can tell you when to buy Bitcoin. Examples of bullish candlestick patterns are hammer, doji, morning star and bullish engulfing.

It is also possible to incorporate the use of trading robots into chart analysis. For example, some robots are based on trend-following analyses. In this case, a robot can be designed to analyze and find a chart pattern such as a bullish or bearish flag. As a result, the bot will initiate a bullish trade when it detects the pattern.

4. Using robots for cryptocurrency trading

A popular method of determining whether the time has come to buy Bitcoin is to use trading robots. A robot, also known as an expert advisor, is a piece of software that analyzes chart patterns and then decides whether to buy or short a cryptocurrency.

Trading Robots are created by combining several approaches to the market. Some are designed to analyze the market using technical indicators such as moving averages, relative strength index (RSI) and relative strength index (RVI). These indicators perform analysis and predict whether an asset price will rise or fall.

Other trading robots are designed by combining technology aspects such as artificial intelligence (AI) and big data analysis. For example, a bot will scan the market and identify positioning patterns among participants. It will then analyze this data and predict whether it is ideal to buy or sell BTC.

There are several advantages of using trading robots such as Bitcode Prime in the crypto space. First, these robots work all day. Furthermore, these robots have different risk management tools such as stop-loss and take-profit.

Robots also have some disadvantages. For example, some robots may not perform well when market conditions are too volatile. Some are created to do well during periods when the markets are trending, while others are built for volatile markets.

Additionally, not all crypto trading robots accept all cryptocurrencies. Some of them only allow you to trade Bitcoin while others allow you to trade other different cryptocurrencies and assets.

In addition, depending on the market conditions, some trading robots can predict when it is best to buy or sell better than others. For these reasons, you should always do your research before choosing your robot, as not all trading robots work the same way and each has a unique trading strategy.

5. Portfolio trackers

Portfolio trackers are an absolutely useful tool! Portfolio trackers are the most widely used crypto tool and will help you keep track of your portfolio. You can see the total value of your investments, the 24-hour change in value of your portfolio and the performance of individual coins in your portfolio at a glance.

If you notice that one coin is hurting your portfolio, you can decide what to do with it. It will help you reduce risk and maintain profits. It will help to protect you from complying with increasing assets, to continue generating profits.

For example, if you want your BTC holdings to always be worth 10% of your portfolio, but BTC rises in price, increasing its value to 30% of your portfolio, you can rebalance your risk by selling some eth and posting some profit right away.

How to Identify the Right Time to Buy or Sell Crypto?

A common question among most traders and investors is how to identify the right time to buy and sell cryptocurrencies. In this article we have looked at some of the most popular strategies to use.

While not all of them are perfect approaches, they will provide a good way to determine when to buy or sell BTC and other coins. It is always recommended that you use risk management strategies such as having a stop-loss, reducing leverage and embracing good position sizing strategies.