Although Bitcoin has recorded a new all-time high, recent analyses indicate that retail investors have not yet returned to the market. However, positive signals from the current market suggest that a wave of retail investment may soon be triggered. But is this a good opportunity to start investing in Bitcoin when the price has reached six figures? Experts are presenting many contrasting views on this issue.
Should we start DCA Bitcoin now?
One of the popular strategies that retail investors use when participating in the crypto market is dollar-cost averaging (DCA). According to Bitbo's calculations, if a retail investor invested $1,000 each month into Bitcoin over the past two years, they would have accumulated approximately 0.4588 BTC, yielding a 114.8% return. This figure demonstrates that Bitcoin remains an attractive asset for long-term investors, despite past market volatility.
Nevertheless, the question arises whether the DCA strategy is still effective when Bitcoin has exceeded $100,000? This becomes even clearer when an investor named Steve, who publicly admits he is not a Bitcoin enthusiast, decides to invest $1,000 each month into Bitcoin throughout Donald Trump's presidency. Steve's decision may reflect the renewed interest of retail investors in Bitcoin, especially when it is priced as high as it is now.
Expert evaluations: Is now the time to buy?
Jake Claver, CEO of Digital Ascension Group, believes that implementing a DCA strategy at this time may not be a wise decision. He argues that we are currently at the 'cycle peak', and there could be a 10% drop in value before the next bear market appears. According to him, the DCA strategy should only be applied when the market is at its bottom, rather than at its peak.
"The capital outflow from Bitcoin has already begun. Buying any cryptocurrency other than BTC would be a better option before the Altcoin season," Jake Claver asserts.
Contrary to Claver's view, Udi Wertheimer, a prominent investor in the crypto community, believes that the decision not to buy Bitcoin when it reached $120,000 could be a significant mistake.
"The most expensive mistake you can make is refusing to buy Bitcoin at $120,000 just because you sold it at $30,000. My friends and I sold all our Bitcoin at $100 and only started buying back at $500–$1,000. Do you think we lost sleep over this? Do whatever it takes to get rid of that mindset."
With Wertheimer's advice, he emphasizes that in investing, what matters is not the price at the time of purchase but the acceptance of past mistakes and persistence with a long-term strategy.
Is this the 'Final Dance' before the peak?
Data from CryptoQuant provides an optimistic view of Bitcoin's future.
According to recent analysis by Joohyun Ryu on this platform, Bitcoin has not yet entered the euphoric phase characteristic of past market peaks. Instead, he suggests we might be at the beginning of a phase he calls the 'final dance' – a strong growth phase before Bitcoin reaches new highs.
Ryu's perspective is supported by the 'greed' index, which is currently at a moderate level, much lower than its peak in 2021. He also points out that the rHODL ratio, an important indicator showing long-term holding behavior, is currently at only 32%. This is a signal that retail investors, also known as 'small fish', are still quite hesitant to enter the market, and their capital flow is not yet strong like in truly euphoric phases in history.
"A prime example is that the rHODL ratio is currently at 32%. This index reflects the asset allocation and behavior of different investors. In periods of true euphoria, we often see a significant capital flow from retail investors, which has not yet clearly happened," Joohyun Ryu explains.
Debates surrounding the DCA strategy into Bitcoin at high prices indicate that the current market is polarized between cautious investors and those seizing opportunities. Some believe that Bitcoin is at the peak of the cycle and the market may be preparing to enter a recession. In contrast, others argue that this is just the beginning of a strong growth cycle, and investing in Bitcoin now could yield significant profits in the future.
Only time will tell whether the strategy of investors like Steve will succeed, but one thing is certain: the volatility of the cryptocurrency market will continue to attract the attention of investors worldwide. While some remain wary of the cycle peak, others are willing to take risks to seize growth opportunities.