Is this the right time to invest in Bitcoin?
Bitcoin has seen a strong start to 2023, reversing the previous downward trend that the market observed in late 2022. It climbed from $16,000 on January 1st, marking a 63% increase to reach $27,152 by the present year. In the prior month, BTC’s price even surpassed $30,000, fueled by optimism about the Federal Reserve potentially nearing the end of its rate-hiking cycle and signs of inflation easing.
However, during recent weeks Bitcoin has seemed to be retracing its gains, which is largely attributed to a deteriorating macroeconomic environment. Factors contributing to this decline include a persistently tight labor market, stubbornly high inflation levels (April’s CPI report showed minimal progress in disinflation, primarily due to a 4.4% surge in used car prices), and Federal Reserve Chair Jerome Powell’s statement indicating a prolonged journey to bring inflation down to 2 percent.
Presently, the markets are assigning only a 5% probability of a 25 basis point interest rate increase by the Federal Open Market Committee (FOMC) in June. From our perspective, the markets are undervaluing the likelihood of such an increase. Considering the ongoing dynamics of inflation and economic growth, there is a probable chance of a 25 basis point hike in June, unless a debt ceiling crisis emerges. Such an increase would likely have a negative impact on Bitcoin.
Should you consider buying BTC at this juncture? The succinct answer is ‘probably not.’ The overall macroeconomic backdrop for Bitcoin appears bearish. Our analysis of various on-chain and flow metrics for Bitcoin yields a neutral assessment. Consequently, if your investment horizon spans two to four weeks, it may not be an opportune moment to invest in Bitcoin.
Additional Read: How to Buy Bitcoin in Iniaia?
How to time the crypto market?
For Indian crypto traders, effectively navigating the global crypto market’s operational hours and time zones is crucial to strategize their trading activities with periods of heightened volume and market activity. While the majority of crypto trading is concentrated within US trading hours, Indian traders can still uncover profitable opportunities by strategically reshaping their trading timetable.
The crypto market operates around the clock, permitting traders from worldwide locations to participate at any given time. Nonetheless, it’s worth emphasizing that specific time frames exhibit notably greater trading volumes and heightened market dynamism. The key lies in identifying the overlapping hours between Indian local time and the prime trading periods in the US, which typically coincide with the evening or night hours in India.
By aligning their trading schedule with US trading hours, Indian crypto traders can tap into amplified liquidity and trading prospects. During these overlapping hours, the market tends to exhibit increased activity and dynamism, characterized by elevated trading volumes and more significant price fluctuations. This presents Indian traders with enhanced opportunities to execute trades at their desired prices and capitalize on market shifts.
Furthermore, participation during US trading hours enables Indian traders to engage with a more extensive pool of market participants, including institutional investors and traders from other significant crypto markets. This interaction can result in heightened market transparency, narrower spreads, reduced slippage risks, and an overall improvement in market efficiency.
To leverage US trading hours to their advantage, Indian traders can contemplate modifying their trading schedule by allocating specific time blocks during the evening or night hours. This strategic approach empowers them to actively partake in the market during periods characterized by heightened trading volumes and amplified liquidity. Now, let’s delve deeper into some of the factors influencing this phenomenon.
Read More: Bitcoin Price Prediction
What is the best time to buy bitcoin?
For Indian crypto traders and investors, finding the optimal trading time slots can greatly help their trading experience and potential returns. Here are a few options that align with the Indian time zone and provide conditions that are favorable for crypto trading:
- Early Morning (6:00 AM – 9:00 AM IST): This period often witnesses significant price movements, making it suitable for active crypto trading strategies.
- Late Evening (9:00 PM – 12:00 AM IST): The usual increased trading volume during this time can result in enhanced liquidity and potentially more favorable pricing conditions.
- Weekends (Saturday and Sunday): While the crypto market operates 24/7, weekends can offer unique trading opportunities for Indian traders. Additionally, major news announcements or market-moving events during weekends can create volatility, presenting potential trading opportunities.
Even though time matters, there are a few fundamental factors that also play a role in you deciding the best time to buy bitcoin. They are as mentioned below:
- Risk Management: Bitcoin is a high-risk asset; invest the money that you can afford to lose. Approach Bitcoin as a means to gradually grow your wealth, not as an all-or-nothing bet.
- Diversification: Consider diversifying your portfolio; explore various other crypto assets like Ethereum or altcoins. Look into other blockchain-based investments, as even stable cryptos can be volatile.
- Avoid Hype: Ignore the hype surrounding cryptos, as seen with non-fungible tokens (NFTs) in 2022, which lost significant value after a peak.
- Informed Decision-Making: Base your decisions on your own market research and advice from certified professionals. Be cautious about investing based on influencers’ social media posts.
- Start Small: Begin with a small investment, ideally not exceeding 10 percent of your total capital. Emphasize moderation in your crypto investments.
- Prioritize Cybersecurity: Crypto assets are often targets for cybercriminals. Make use of a cold wallet, employ cybersecurity practices like a VPN and password manager, and be cautious when browsing and downloading online.
- Understand Crypto assets: Make an effort to comprehend the technology behind crypto. Avoid being swayed by buzzwords or lofty promises about concepts like Web3 and the metaverse. An in-depth understanding helps distinguish sound investments from potential losses.
How can Crypto SIP help with the market volatility?
While planning your crypto trading strategies, it is important to explore the newer option that is now available for investors. That option is known as crypto SIP. SIP in crypto works just how it does for traditional SIPs.
SIPs in crypto involve investments at regular intervals, and the amount you want to invest depends on your investment capacity. In short, Crypto SIPs lets you invest in your favorite tokens at regular intervals. The day of the week can be chosen as per your wish.
How does Crypto SIP work in CoinDCX?
Start your Crypto Investment Plan in Bitcoin or our other available coins within minutes with these simple steps: (Time needed: 4 minutes)
Step 1: Open your CoinDCX Crypto App & Select “SIP” on your home screen
Step 2: Select the coin you want to start your SIP for
Step 3: Select your ‘Frequency & Day of SIP’
Step 4: Select the amount you want to invest on a weekly basis
Step 5: Click on “Start SIP”
That’s it! Enjoy your investing in Bitcoin & more without regularly keeping tabs on the crypto market!
Note: Make sure you have funds in your wallet
How low will Bitcoin go in 2023?
- Bitcoin token price has been showing bullish signals in its recent overall price activities. However, after touching the $30k mark, the price of BTC is now standing at $26k levels.
- The price of BTC is still believed to be consolidating between $28,200 and $28,500 for a while before it rises above $29,000 in the first few weeks of Q4 2023.
- With Bitcoin Sparks and Bitcoin halving playing their role in the market sentiments, there is a possibility that the buyers’ emotions to remain strong. If so, the BTC prices could surge even higher, potentially reaching a range between $30,500 and $30,700 by the end of 2023.
Bitcoin presents a captivating opportunity, serving both as a transactional medium and a speculative commodity, which has consistently interested investors since its inception. However, its extreme volatility remains a prominent characteristic.
While Bitcoin holds promise for substantial gains, it also carries the risk of substantial losses. Hence, Bitcoin or any other crypto asset should be approached with caution.
Bitcoin emerges as an innovative safe-haven asset amid global uncertainties.
Position sizing: Your shield against crypto market volatility.