When is the Best Time to Buy Bitcoin & How to Maximize Your ROI

12 de noviembre de 2024

Author: Bitcoin Magazine Pro Team

Bitcoin can be a wild ride. Prices go up, prices go down, and the fluctuations can happen in minutes. If you've got your eye on BTC, it can be tempting just to jump in and buy some. But what if you waited a little longer by understanding bitcoin supply and demand? Prices always change, and it’s tough to know when to buy. Understanding When Is the Best Time to Buy Bitcoin can help you make the right decision, and this article will give you the insights you need to confidently invest in Bitcoin at the right time to achieve maximum returns on your investment.

Bitcoin Magazine Pro has a solution to help you with your Bitcoin investment goals. Bitcoin analysis is a valuable tool that can help you make sense of the current market conditions so you can confidently strategize your investment approach. 

Over $2.8 Billion Bet on Bitcoin Topping $90,000 as it Hits All-Time High

reaches all time high - When Is the Best Time to Buy Bitcoin

Bitcoin’s recent surge has sparked renewed optimism among investors, with large-scale options bets indicating a belief that BTC is poised to go even higher. Over the past week, Bitcoin jumped to an all-time high of nearly $81,000, and derivatives markets have seen a huge influx of capital supporting further price increases. 

Open interest in Bitcoin options contracts on the Deribit exchange with strike prices above $90,000 has skyrocketed to over $2.8 billion, reflecting the conviction of Bitcoin bulls. “The options market’s bias is heavily toward continued momentum,” said Vetle Lunde, head of research at K33 Research. “Call options trade at a premium to puts, and open interest in out-of-the-money calls has grown.” Call options give investors the right to buy an underlying asset at a specific price for a period, profiting if the asset’s price rises above that level. Put options allow investors to bet on an asset’s decline. The recent surge in Bitcoin’s call options indicates that many investors expect the BTC to continue its upward trajectory.

Market Momentum Favors Bitcoin's Price Surge  

Bitcoin’s latest price surge follows a prolonged period of low volatility and lackluster trading activity. The latest rally has helped it break out of this consolidation phase and enter a new price discovery zone. The spike in Bitcoin’s price has also been accompanied by growing market interest, with BTC futures premiums soaring to reflect investor confidence.  

Last week, Bitcoin’s annualized volatility dropped to its lowest since 2020, signaling a potential market reversal. The recent price action in Bitcoin has triggered a wave of liquidations, with over $121 million in future positions in Bitcoin wiped out in the last 24 hours. Of these, nearly $83 million were in short positions, indicating that the recent price rally caught many investors betting against Bitcoin. 

Contrasting Sentiment: Bearish Bets on Bitcoin Remain

Despite the rally, many traders remain cautious, with 60.2% of Bitcoin futures positions on Binance held by investors betting against it. This stark sentiment contrasts with the ongoing price surge and indicates that many traders expect a price correction to occur before Bitcoin can make another move. 

The bearish bets also highlight that while the market may be rallying, many traders are still skeptical about the sustainability of the current price action. “Following the recent run-up, short positions on the BTC exchange Binance are on the rise,” Bitcoin analyst Ali Martinez wrote on X. “Bitcoin analyst Ali Martinez reports that 60.2% of all traders with open Bitcoin futures positions on Binance are currently betting against.” 

Long-Term Bitcoin Price Predictions Remain Bullish  

Market analysts remain bullish over the long-term prospects as it enters the price discovery zone. Veteran trader Peter Brandt stated that the BTC price is making a bullish breakout with the inverse head-and-shoulders pattern on a multi-year chart, setting the stage for the next rally to $250,000. He shared the comparison to the spot Gold prices after a similar breakout. Of course, Brandt’s prediction for the Bitcoin price rally is on a long-term horizon. 

Bitcoin ETFs Fuel Current Market Momentum  

Amid strong demand for spot Bitcoin ETFs, the Bitcoin price has already experienced an 80% runup. Seeing a multi-month consolidation following the Bitcoin halving event, the US election result, and the latest Fed rate cut provide an additional catalyst for BTC to rally ahead. Spot Bitcoin ETFs, including BlackRock Inc’s $35 billion iShares Bitcoin Trust (IBIT), have significantly driven the current BTC price boom. 

According to Farside Investors data, IBIT recorded daily net inflows of nearly $1.4 billion on November 8. A day earlier, trading volume for the iShares ETF hit an all-time high, highlighting the bullish sentiment around Bitcoin amid Trump’s political comeback. The total market cap of all spot bitcoin ETFs is now above $80 billion, and in the last three trading days alone, the spot funds collectively added $2.3 billion. 

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When is the Best Time to Buy Bitcoin?

best time to buy - When Is the Best Time to Buy Bitcoin

Finding the right time to buy Bitcoin can pay off significantly. For one thing, anyone buying Bitcoin (stacking sats) for long-term holding can get more Bitcoins for their money by placing their buy orders at the right time. Getting 2% more than you usually do would mean greater rewards in the future. 

The second reason for knowing the best time to buy Bitcoin is that it prevents an investor from yielding to the fear of missing out (FOMO). Many buy Bitcoin at high prices because they fear losing out on possible short-term gains. On the other hand, finding the best time to buy and sticking to the schedule protects one from the losses usually associated with panic buys.  

The Best Day of the Week to Buy Bitcoin 

best day to buy - When Is the Best Time to Buy Bitcoin
Statistical evidence shared by Capriole digital asset manager Charles Edwards supports that Sunday evening is the best day of the week to buy Bitcoin. The chart below shows that those who buy BTC during this period see higher returns on their investment than purchases made during weekdays. A simple way to understand the chart above is that the daily average Bitcoin return each weekday is best on a Monday after the investor buys his stack. The returns in the last eight years have usually been around 0.9%. 

Weekend Dips for Bitcoin Buying Opportunities

One possible reason why Sunday evenings are the best time to buy BTC is that trading volumes on BTC exchanges drop over the weekend. Few active traders are in the market, and there are more sell than buy orders. The dip in buy orders and general trading volume means prices become more volatile at the start of the new week. While prices usually dip over the weekend, reopening many exchanges will increase volume, impacting prices positively. US derivatives giant CME Group, which also contributes significantly to Bitcoin’s global volume, also goes on a break during the weekend. 

CME's Sunday reopening increases the chances of a volatile opening at the start of a new week and a possible price increase for BTC. So, although the Bitcoin market trades 24/7 globally, reducing the number of active traders and volume at the weekend typically pushes the BTC price up, barring any negative mainstream news. Buying your stack at the weekend (Sunday evenings precisely) gives you a shot at being a fraction up when the markets start to reopen for a new week.  

The Best Time of the Month to Buy Bitcoin  

Retail investors constitute a significant percentage of Bitcoin investors. Buyers on PayPal and Square’s cash app reportedly consume a substantial amount of Bitcoins compared to daily network issuance. A common practice among these armies of retail investors is to set up recurring buys that go off once they receive their paycheck towards the end of the month. 

Barring black-swan events such as the market crash caused by the COVID-19 pandemic, these buys typically cause the price of BTC to go up. In simpler terms, buying Bitcoin near the end of the month, when the DCA army is out in full force, means you’d usually buy it at a higher price. Completing your purchases mid-month or anytime before the month-end rush would allow you to get them for better prices.  

The Worst Time and Day to Buy Coins  

The Bitcoin market’s dynamic nature makes it almost impossible to pinpoint the worst time and day to make purchases. However, by going by the principle of “buying low and selling high,” one could find the worst time and day for a particular period in a week, day, or month. The above chart considers the period between December 9 to Dec 16, 2023. A close observation showed a patterned Bitcoin dip approaching a new day at UTC for several days the same week. This could suggest that purchases at the end of the day provide a chance to buy BTC at a cheaper price. 

The above charts do not provide a definite pattern for determining the best time of the day to buy Bitcoin. It shows how one can time purchases based on consistent price action for a specified period. The worst day to buy BTC is when prices are on an uptrend. Such rapid price growth only brings short-term gains and climaxes with a period of consistent losses. Making it a principle to buy BTC only on days when it is down to a certain percentage (-6% or more) is a better way to get more seats for your money.  

Should You Buy Bitcoin Low and Sell High?  

Buy low, sell high is a fundamental investment principle. Applying it to Bitcoin can be tricky due to its substantial volatility. Rather than trying to time the market, which could lead to impulsive decisions driven by market swings, it's typically recommended you consider a long-term Bitcoin investing plan. When it comes to Bitcoin, accurately predicting price shifts for buying low and selling high can be challenging. Instead of trying to time the market, an approach called dollar-cost averaging (DCA) is often advised. 

In this strategy, you regularly invest a set amount of money, regardless of Bitcoin's current price. This helps lessen the impact of market volatility since you buy more Bitcoin when prices are low and less when they’re high. DCA reduces your average cost per unit over time and promotes consistent investing instead of reactive decisions based on market fluctuations. In addition, it allows you to benefit from Bitcoin's potential long-term growth as you gradually accumulate more units of BTC.  

What Impacts the Best Time to Buy BTC?  

Several factors include Bitcoin’s market price and the best time to make new purchases. Here are some of the most prevalent:  

Market Sentiment  

Markets are irrational. Price swings may occur for no tangible reason and quickly change the market sentiment and outlook from bullish to bearish. Almost everyone will be burning their money by selling at a low price. That is when being a disciplined investor becomes your greatest asset. Using the “buy low, sell high” principle mentioned earlier, it is easy to see that the best time to buy BTC is when the market is bearish and coins are available at discounted prices.

A good example was the bear market, which pushed BTC near $3200, and the 2020 March crash, which saw BTC slump slightly above $4,000. Another example is the Bitcoin decline to the $15,000 region after several multi-billion dollar BTC-related projects such as:

  • Terra
  • Celsius
  • FTX 

Collapsed in 2022. Fears over the industry's future led to a market sell-off that was eventually erased after just one year in 2023. While one cannot accurately predict when or whether we’ll see another Bitcoin black-swan event, keeping cash handy to invest at such times could be the best Bitcoin purchase you’ve ever made.  

Media Reports  

Media reports are another factor that adversely affects the price of BTC. Events such as a significant exchange security breach, the possibility of a Bitcoin ETF, and the involvement of large institutional investments affect prices either way. Capitalizing on adverse media reports that suppress the price of Bitcoin may be another approach to scooping up coins at great prices. 

News of central bank interest rate hikes contributed largely to Bitcoin's price slump in 2022. The decline was eye-catching even though Bitcoin's core fundamental properties didn't change, and the network effect probably became stronger. Media reports exacerbate investor fears and present opportunities for savvy investors to scoop up cheap assets.  

Key Events  

Key industry events such as Bitcoin halving historically pushed the price of BTC up in the months leading up to it and then eventually dropped in the aftermath. For instance, the chart below shows the BTC price wave from April to the May 2020 halving event. Prices moved from around $6300 to just below $10,000 in the build-up to the halving, while a significant price dip occurred on May 12th, the actual halving date. 

The effect of the halving that reduces Bitcoin’s supply is usually felt in the long term. The 2020 halving also led to the price of BTC reaching $69,000 in 2021. However, buying in the months leading up to it allows investors to price in on the event and reap quick short-term gains. You can sell to the Bitcoin halving in the buildup and then sell again to repurchase at a lower price once the initial hype fades.  

Should You Buy Bitcoin Now?  

The best time to buy Bitcoin was years ago. The second best time is right now. Bitcoin has been the best-performing asset of the last decade and has inherent properties that almost guarantee a price increase in the years ahead. Many notable investors, including:

  • Robert Kiyosaki
  • Paul Tudor Jones
  • Stanley Druckenmiller

Mexican billionaire Ricardo Salinas Pliego recommends at least 1% exposure to Bitcoin and tips BTC to eventually become the digital version of gold. ' If Bitcoin were to achieve half of its proponents' beliefs, it could overcome its volatile nature and reach numbers beyond the current $400 billion market cap. Will each Bitcoin eventually be worth $100,000? Time will tell.

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Should You Buy Bitcoin While It's Close to Hitting an All-Time High?

should you buy right now - When Is the Best Time to Buy Bitcoin

Bitcoin has a history of unpredictable and violent price swings. Its value skyrocketed in 2017, reaching its peak price of nearly $20,000 in December, before plummeting to around $3,000 by December 2018. If you had purchased Bitcoin near its peak in December 2017, you would have endured a painful correction that would have wiped out more than 85% of your investment by mid-2019. Even though the price of Bitcoin has recovered and exceeded its previous all-time high, it took more than three years to do so. 

If you decide to buy Bitcoin near its peak, you should be prepared for the possibility of a correction and what that could mean for your investment. The potential for a Bitcoin price correction shouldn’t deter you from buying, especially if you plan to hold it for the long term. Just make sure you understand the risks and can tolerate the volatility until the price recovers if it does. 

Is There Any Reason to Buy Bitcoin When It Hits All-Time High?

There’s no denying the excitement of Bitcoin hitting an all-time high. These milestones can fuel positive speculation that drives higher prices, enticing buyers to enter the market. If you’re considering buying Bitcoin near its all-time high, take a step back to assess your motivations first. 

Why am I investing?

First and foremost, think about why you want to invest in the first place. If you’re terrified of missing out, step back before proceeding. Before investing in Bitcoin, it’s critical to understand it thoroughly. ”Educate before allocating’ is a phrase that my friends and I use,” says Boneparth, a Bitcoin investor since 2014. It may be tough to take a step back, especially now that Bitcoin is at an all-time high, but it’s worth learning about what it is, how it works, and the risks before parting with your money. 

Can I handle volatility? 

Examine your ability to endure large price swings since Bitcoin is volatile. "That's not simple for most investors to deal with," Boneparth adds. For other people, the volatility "may be OK," according to Boneparth, because it "may correspond with your appetite for risk, your personal risk tolerance, and investing time horizon." "However, you must live with it." Other investors may want a more steady investment. Regardless of your risk tolerance, financial experts advise that bitcoin is a riskier investment than low-cost index funds, which should be kept in mind. 

How Much Can You Afford to Allocate?

Once you know how much volatility you can handle, you can figure out how much money you can invest. "Be extremely careful about how much you designate and what you can endure," Boneparth advises, "because if 80 percent of your net worth is connected to Bitcoin and it falls 30%, that's hard." Depending on what you can afford, a lower Bitcoin exposure can help you hedge against market downturns. Remember that financial experts advise only investing an amount you can afford to lose since your entire investment might be lost. 

The Long-Term Outlook for Bitcoin

Deciding whether to buy Bitcoin should not be based on short-term market fluctuations. Tracking the day-to-day volatility of Bitcoin can be overwhelming. Only buy Bitcoin if you feel confident about its long-term prospects as an entirely new asset class that belongs in your portfolio for both upside and diversification purposes.

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