Bitcoin held support while the Nasdaq made a new low. There’s a high chance the price won’t drop to $58k again. Here’s why dollar-cost averaging through the midterms and beyond is a solid plan.
In my last article I broke down how I measure relative strength between Bitcoin and the Nasdaq. Yesterday gave us a perfect test. The Nasdaq had its worst day since June, down 2.6%, and closed at a new low for this pullback. Bitcoin dropped too, and the breakout above $82,800 didn’t hold. But Bitcoin held its $81,000 support. The Nasdaq made a new low. Bitcoin didn’t. That’s relative strength.
$BTC Daily Chart
I’m writing this about two hours after the market opened, so the New York session is still live. The chart above shows Bitcoin holding support so far today, and until the session closes, I’m expecting sideways chop heading into the weekend.
So instead of a normal market update today, I want to talk about the long game: DCA (dollar cost averaging) into Bitcoin.
What is DCA?
DCA means you invest the same dollar amount on a regular schedule, say every week or every month, no matter what the price is doing. The amount you spend never changes. What changes is how much Bitcoin it gets you. When price is down, that same amount buys more Bitcoin. When price is up, it buys less. Over time you end up with a solid average price without having to time the bottom perfectly. It’s the same way a lot of people stack gold, a little at a time, for the long term.
Why I think the bottom is likely in:
Bitcoin bottomed on July 1st at around $57,700. That’s where we got a two-week bullish divergence, and price hasn’t been back since. Even if we got a $10,000 pullback from here, Bitcoin would still be sitting well above that July low. I don’t think we revisit it, but even if we do, DCAing lets you take advantage of the price drop.
One thing’s for sure, we’re nowhere near the top. Bitcoin is still about 35% below its all-time high from last October. You’re not buying a euphoric peak here. You’re still buying an epic drawdown, but at a time where $BTC is finally showing strength vs the Nasdaq.
Why start now:
The midterm elections are November 3rd. Historically, stocks tend to struggle heading into the midterms and pump after them. The S&P 500 has been higher one year after every single midterm election since 1950. Bitcoin trades directionally with the Nasdaq, so that tailwind matters for crypto too.
Even if we get a drop right after the election, history says a year later prices are higher. So if you DCA over the next several months, you’re likely accumulating near the bottom of this cycle instead of chasing it after the run.
Why DCA works so well for Bitcoin specifically:
If you’ve read this far, you probably already understand Bitcoin’s value as a long-term investment and as a hedge against fiat inflation. Governments keep printing more money, and every dollar you hold in cash buys a little less every year. Bitcoin has a fixed supply of 21 million with a halving of distribution every 4 years. That’s how the code was designed, which will remain true for our entire lives, until the last coin is mined around the year 2140.
DCA fits that thesis perfectly. You’re steadily converting dollars that lose value into an asset that can’t be printed, and you’re doing it without trying to nail the exact entry.
You don’t have to trade every day:
Not everybody can trade every day or watch the market seven days a week like I do. That’s ok, I will keep you up to date. DCA lets you get exposure without stressing over every daily price swing. Set it, stick to the schedule, and let time do the work.
If you want to learn the shorter-term side of how I read these markets, that’s what I teach at CassiusCuvee.com, and the Swell Point indicator is built to help you spot momentum shifts on your own charts. If you want my calls in real time, tap in with my private Discord group, The Profit Circle. General chat is free. 🌊
