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When should you buy bitcoin?

right time to buy bitcoin

February 12, 2021 | 

3061 Views | 

JOHN K MWANIKI | 

Get Into Cryptocurrency Trading Today

Despite its popularity, bitcoin is highly volatile. It is a double-edged investment that can earn you millions in just a few months, or you can lose it all. But, with the right tactics and mindset, you are likely to reap your investment soon.

Similarly, you can join the world of cryptocurrency hassle-free. Thanks to new and innovative mobile and web services, now you can buy bitcoin and other cryptocurrencies from anywhere in the world. However, many providers still charge unbelievably high commissions and rates for such transactions. Regardless, this investment is totally worth it. So, when should you buy bitcoin?

Since not many people in the crypto world have financial knowledge, many rely on traditional financial trends or popular crypto analysts. This article will discuss the best time to buy bitcoin and some possible theories that aid in getting bitcoin timing right. Without further ado, let dive in!

So, when should you buy bitcoin?

One of the main questions that beginners in the crypto world ask is 'what is the right time to buy bitcoin?' There is no right or wrong answer to this question as no one can predict bitcoin's price in the future. However, the answer to this question depends on your reason behind buying bitcoin. 

For instance, if you are buying to trade bitcoins and are looking for a short-term gain, you probably have to time the market and learn different bitcoin trading techniques. On the other hand, if you are looking to join the bitcoin world for its underlying technology and its bright future, there are a few ways to go about it strategically. They include:

Buy anytime despite the price

Long-term crypto analysts believe that you can buy bitcoin and other cryptocurrencies at any time without considering their price. They have the belief that the cost of bitcoin is on a continuous rise. Regardless of bitcoin's price at the time of buying, the price will eventually go up in the long term. 

Dollar-Cost Averaging

Popularly known as DCA, Dollar Cost averaging is the ideal strategy to use if you are a beginner in the crypto market. In this strategy, the trader buys bitcoin recurrently on the same date and a fixed amount. As a result, you can easily average out the fluctuations in the exchange, which helps you keep track of bitcoin prices. 

What is the best day to buy cryptocurrency?

Unlike the stock market that operates only during certain hours and days of the week, the cryptocurrency market is open 24/7. So, you can trade in the market at any time of the day so long as you have a stable and reliable internet connection. 

Although there are no specific times and days to trade bitcoin and other cryptocurrencies, there are times with more or less volume than others. So, when should you buy bitcoin during the day? According to multiple crypto analysts, early Monday mornings and late Sunday evenings are the best days to buy bitcoin. Why?

Lower trading volumes

Like in the traditional stock market, the bitcoin exchange's trading volumes tend to drop during the weekend drastically. There are fewer active traders in the market, raising the chances for higher volatility as the week begins. Also, bitcoin tends to experience sudden pullbacks when there are low trading volumes, which may lead to a volume spike after the weekend.

CME Closure

CME closure during the weekend is another possible reason why late Sunday evenings and early Sunday mornings are the best to buy BTC. Like the U.S stock market, CME closes its markets during national holidays and the weekends. 

Luckily, the bitcoin market is open 24/7, meaning when the CME closes and opens up on Monday, there is a price gap. The cryptocurrency exchange market then works to fill the gap, giving bitcoin significant price action. 

Three theories to get bitcoin timing right when short-term bitcoin trading

Generally, not many people in the cryptocurrency market have solid financial knowledge. Many of them rely on knowledge obtained from the traditional finance sector, while others are self-taught. Either way, you could earn plenty of money from the BTC market.

According to economists from the prestigious Yale University, there are several factors to consider when buying bitcoin. As a result, they developed a model t predict bitcoin price based on its analysis for the past seven years. 

One of the key observations made was that the bitcoin market heavily relies on momentum. Unlike the stock market and other commodities, when bitcoin's price is on the rise, it is likely to continue to do so in the short-term. Therefore, as a general rule of thumb, investors should invest in bitcoin if its price appreciates by more than 20%in one week.

So, without further ado, let us look into three theories to get the bitcoin timing right.

1.    Theory one

Avoid buying bitcoin on dates that 9-to-5 employees get paid. Experienced traders avoid purchasing bitcoin in the middle and the end of the month as the market is usually flooded by many new and old investors. The logic behind this is that since many people have money in their pockets, they are likely to invest more in bitcoin, meaning the demand will be higher and the price will increase.

2.    Theory two

As mentioned above, late Sunday evenings and early Monday mornings are the best days to buy bitcoin. This is because of the trading volume and price decreases due to various factors. Alternatively, the price of bitcoin is often highest on Fridays and Saturdays.

3.    Theory three

When you ask a crypto enthusiast, 'when should you buy bitcoin?' you are likely to get an answer that suggests the following. Buy bitcoin during the weekend and complete orders as soon as the week starts. Since trading volumes are expected to rise on Monday, traders should exercise caution as the week proceeds.

Conclusion

It is always difficult to answer the question 'when should you buy bitcoin?' The world of bitcoin and other cryptocurrencies is quite competitive and experimental due to its highly volatile nature. No one can predict what will happen in the future. But, by following the techniques outlined above, you can have the upper hand in knowing the right time to buy bitcoin. 

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