Bitcoin: Trade the cycle, not dollar-cost average

Dollar-cost averaging is sensible for steadily appreciating assets, but it can be costly for bitcoin. The asset has completed four full market cycles since 2011: a halving cuts new supply, adoption and price accelerate, leverage builds, then the cycle reverses with drawdowns that have historically exceeded 70%.

The peak-to-trough loss for a buy-and-hold investor across bitcoin's history is −80%, and that outcome has occurred three times. DCA can smooth the ride only marginally; it often leaves investors exposed when the regime has structurally turned negative. A regime-aware approach tracks observable price and on-chain signals to identify bull and bear phases.

Using ten independent indicators across momentum, trend and cost-basis metrics, the research shows clear dispersion: when most signals are positive, average monthly returns have been +25%; when the majority are negative the average is 6% — a 31-percentage-point spread.

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