Bitcoin Investment Anchor Point: From Strategic Perspectives to Methods for Identifying Market Bottoms

Bitcoin has proven to be an outstanding saving technology for patient investors, but also a “destroyer of assets” for those lacking perseverance or overleveraging. Currently, with Bitcoin at $70.21K (down from the peak of $126.08K), the market is sending new signals that need to be viewed from different perspectives.

The crypto market is undergoing a “rule-changing” phase. The previous excitement has faded, but the real challenges are just beginning. As Bitcoin enters a “retreat” mode, echoes of past cycles reappear: Bitcoin surged before stock markets peaked, but recent months have been less promising. To date, Bitcoin’s price has fallen approximately 30-40% from its all-time high, and investors can’t help but ask: “What’s next?”

Not everyone can pinpoint the exact market timing, but many strategies can help optimize profits without missing the next wave. The goal of this article is to offer different perspectives, helping you form your own market view and understand when rules might change.

Investment Perspectives: Which Option Suits You?

When we talk about “strategies,” we refer to your attitude and approach to buying, selling, and holding Bitcoin. The ultimate question is: “Are you confident in accurately timing the market?” and whether you can execute that judgment.

Long-term Holding (HODLing): This is one of the first commandments of the Bitcoin community. If you believe in Bitcoin’s long-term prospects and your daily cash needs are met, this approach is very attractive. A significant advantage is that HODLing is also tax-efficient, as you only pay taxes when you sell. Some investors can tolerate an 80% portfolio drawdown, and during market dips, they increase their positions. If you can be patient for years, this method can lead to wealth accumulation across generations.

Dollar Cost Averaging (DCA): This method aligns with the HODL philosophy but is more flexible. You can buy Bitcoin daily, weekly, monthly, or during market volatility. The goal of DCA is to steadily increase your Bitcoin holdings while minimizing the impact of average price increases. For example, if you bought at the peak in 2013 and continued DCA until the price dropped to $200, this strategy would ultimately prove successful. You can use automated platforms like Coinbase, Cash App, or Strike, or do it manually through your preferred exchange.

Blended Approach: Not everyone is fully committed to HODL or DCA. Many investors prefer combining both: you don’t try to perfectly time the market, but you also don’t buy blindly. Your purchase decisions are based on liquidity conditions, price volatility, or when market sentiment is completely shattered. This is an effective strategy, often outperforming extreme approaches, because it respects patience while seizing opportunities.

A key anchor point: You must be disciplined with liquidity. One of the biggest reasons people are forced to sell is mixing operational cash, emergency funds, and Bitcoin into a single “mental account.” When financial surprises hit, Bitcoin can become an unwanted “cash withdrawal machine.” To avoid this, allocate cash for different purposes. Moreover, people don’t get “liquidated” because Bitcoin drops, but because they increase emotional positions, shift into altcoins seeking thrill, or leverage in hopes of “recouping.” Maintaining a reasonable position size is a competitive advantage.

Time Anchors in the Bitcoin Cycle

Bitcoin’s cyclical nature is an age-old phenomenon linked to halving events. So far, Bitcoin’s price has followed these cycle laws, and we should temporarily assume they will continue.

If the cycle functions normally, we might see a macro bottom around Q4 2026. However, this doesn’t mean you should wait until the start of that quarter to buy; it’s just a reference, indicating that it might still be too early now. Of course, the cycle could end earlier this summer, in which case technical analysis and other signals should be re-evaluated.

Overall, it’s very unlikely that Bitcoin will return to a long-term bull market before late 2026 or 2027. If this forecast is wrong, that’s also great.

Capital Allocation Options with Stable Yields

As interest rates continue to fall, “safe but boring” returns are less attractive. Still, we have some time to enjoy yields above 3%.

Government bonds: SGOV and WEEK offer monthly and weekly yields, holding stable but dull government bonds. Other options include ultra-short-term bond ETFs like SHV, or longer-term bond ETFs such as ICSH or ULST. SHV acts as a cash alternative with some extra yield. WEEK pays weekly interest, suitable for investors needing regular cash flow.

DeFi on-chain options: Although DeFi yields have decreased, some options remain. AAVE currently offers around 3.2% APY on USDT. Kamino provides higher-risk, higher-reward options, often exceeding “risk-free” yields but with additional risks. Diversify your DeFi holdings to mitigate risks.

Exchange and app-based options: Many exchanges like Coinbase reward USDC deposits. Robinhood, if you’re a Gold member, offers 3%-4% yields. In a declining economy, the goal is clear: preserve purchasing power while fighting inflation.

How to Identify Market Bottoms from Multiple Angles

Suppose in September, after a series of adverse factors, Bitcoin is near $50,000. How to determine if the bottom is close? Remember, market bottoms are never identified by a single signal. Build an investment thesis supported by multiple converging indicators from different perspectives.

Time perspective: How long since the all-time high? If over 9 months, it might be time to consider buying.

Momentum perspective: Bitcoin often peaks when momentum wanes. Buying when the weekly RSI is below 40 can be a good signal. Combine with your usual momentum indicators to find a suitable analysis method.

Market sentiment: Cycles often coincide with catastrophic events causing extreme fear, such as FTX collapse, Terra Luna, or global crises. When the market is in darkness and no one wants to buy Bitcoin, that’s when you can confidently enter, especially if multiple signals align.

Technical confirmation: You don’t need to buy exactly at the bottom. For safety, wait for Bitcoin to break back above the 50-week exponential moving average (50W EMA) or the 365-day volume-weighted average price (VWAP). These are strong confirmation signals.

Risk indicator: If related stocks like MSTR (MicroStrategy) break above the 200-day simple moving average (SMA), it may indicate renewed interest and premium for Bitcoin returning to the market.

The goal of this analysis is to help you prepare for the future—taking profits at the top and seizing opportunities at the bottom.