Analysis of Reddit User’s Bitcoin Investment Strategy

Reddit user u/skogsraw shared an analysis comparing different investment strategies for Bitcoin. The analysis indicated that investing variable amounts based on the market’s condition provides higher returns than regularly investing a fixed amount (DCA) during a specific period. Benefits of Variable Investments The analysis compared a fixed DCA strategy of investing $100 per week in Bitcoin with a strategy of investing variable amounts based on an index reflecting the market’s psychological state. In the second strategy, investments were made in different amounts based on the market’s fear and greed levels. In the third strategy, some Bitcoin was sold when an extreme greed signal was given. High Return Strategy The third strategy provided a significantly higher return (184.2%) compared to the fixed DCA strategy and the strategy of only making purchases. The analysis covers a period of at least two major months and one bear market, but skogsraw notes that more […]

Analysis of Reddit User’s Bitcoin Investment Strategy

Reddit user u/skogsraw shared an analysis comparing different investment strategies for Bitcoin. The analysis indicated that investing variable amounts based on the market’s condition provides higher returns than regularly investing a fixed amount (DCA) during a specific period.

Benefits of Variable Investments

The analysis compared a fixed DCA strategy of investing $100 per week in Bitcoin with a strategy of investing variable amounts based on an index reflecting the market’s psychological state. In the second strategy, investments were made in different amounts based on the market’s fear and greed levels. In the third strategy, some Bitcoin was sold when an extreme greed signal was given.

High Return Strategy

The third strategy provided a significantly higher return (184.2%) compared to the fixed DCA strategy and the strategy of only making purchases. The analysis covers a period of at least two major months and one bear market, but skogsraw notes that more testing is needed.

The analysis did not account for periods of extreme greed when Bitcoin network fees peaked. Nevertheless, the user expressed that these strategies could be beneficial in future bear markets.

Additionally, two other high return strategies (AlphaSquared Risk Model DCA and PI Cycle Top Indicator) were examined, but the investment community questioned the results of these complex strategies. The current score of the Crypto Fear & Greed Index indicates the market is in a state of extreme greed.

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