Bitcoin Investors Adopt Smart DCA Strategy as Price Remains Below $117,700
Bitcoin (BTC) has rebounded to approximately $116,300 after dipping to $112,200. Concerns persist regarding its struggle to break the $120,000 resistance level. On-chain data indicates BTC may be in an accumulation phase, potentially preparing for a new all-time high (ATH).
Accumulation Phase Observed
- Analyst BorisVest suggests using Smart Dollar-Cost Averaging (DCA) for strategic accumulation.
- Investors often buy during local tops due to FOMO and avoid purchases at lows.
- Smart DCA recommends accumulating BTC when market prices fall below the 1-week to 1-month realized price, currently at about $117,700.
- The strategy aims to activate hourly purchases during sell-off periods to align BTC and USD cost basis.
- As long as BTC is below $117,700, Smart DCA signals accumulation; selling should occur once it exceeds this price.
With BTC trading near $116,000, it remains in the accumulation phase but is nearing the realized threshold. Currently, BTC is approximately 5.2% below its ATH of $122,838 from July 14.
Potential Risks for BTC
- Some analysts warn that Bitcoin's realized price shows signs of weakness, with a drop below $105,000 potentially leading to increased sell-off pressure.
- Binance’s net taker volume has turned negative, raising concerns about a near-term correction.
- Rising Bitcoin ETF outflows indicate potential weaknesses in demand.
- Some on-chain metrics suggest BTC might just be cooling off after an overheated phase.
At press time, BTC is priced at $116,316, reflecting a 2.1% increase over the past 24 hours.