The most suitable approach for individual investors who cannot pinpoint the true bottom is staggered entry

CoinWorld reported:
Is it time to rush to the bottom now?
Although the implied volatility of the market is currently at a low level, it has been on the rise in recent years. This indicates that market sentiment is becoming more unstable, and although panic has not yet occurred, irrational emotions may spread.
The opportunity to bottom out (the real bottom, but extremely difficult) comes after real panic occurs
When the market really panics, prices tend to be significantly lower than the intrinsic value of the assets. This is the best opportunity for bottom-fishing, as investors can purchase high-value assets at very attractive prices. Investors should remain calm, wait for further developments in the market, and seize the true bottom-fishing opportunities.


Specific reference to several time points of Bitcoin
March 2020 -33%, implied volatility 190
Bitcoin performance: In March 2020, the price of Bitcoin dropped to a low of about $4,000. This crash, known as “Black Thursday,” saw Bitcoin plummet by over 50% from its high of about $9,000 in just a few days.
Bottom-fishing signal: Despite strong market panic, this crash also provided an excellent opportunity for bottom-fishing. With governments and central banks around the world launching massive economic stimulus plans, Bitcoin quickly rebounded over the next few months and had recovered and broken through the historical high of $20,000 by the end of the year.
May 2021 -45%, implied volatility 160
Bitcoin performance: In May 2021, the price of Bitcoin dropped to about $30,000. This crash was about half of Bitcoin’s historical high of nearly $65,000 in April.
Bottom-fishing signal: Despite panic selling in the market, bottom-fishers and long-term investors quickly intervened, believing in Bitcoin’s long-term prospects. Subsequently, the price of Bitcoin gradually recovered and once again surpassed the $60,000 level by the end of 2021.
June and November 2022 -22%, implied volatility 110
Bitcoin performance: In November 2022, the price of Bitcoin dropped to about $16,000. This crash reflected a significant blow to market confidence in the crypto industry, especially a crisis of trust in some major trading platforms.
Bottom-fishing signal: Nevertheless, some investors saw this as an excellent entry point for holding Bitcoin in the long term. As the market gradually digested the negative news, the price of Bitcoin stabilized in the following months and showed signs of a rebound.
July 2024 -8%, implied volatility rose to 57.5, waiting for bottom-fishing
Although the implied volatility of the market is currently rising, it has not yet reached the level of real panic. Investors should closely monitor market trends, and large funds need to wait for more obvious panic signals before bottom-fishing.
The crashes at the above time points and the subsequent bottoms have provided valuable lessons for investors. However, to be honest, most people are not willing to enter the market even if given the opportunity for situations like 312 and 5119, thinking that it is going to zero.
Short-term market fluctuations should not affect the long-term evaluation of Bitcoin’s value. Patient investors who wait for panic selling to occur often find undervalued assets and reap substantial returns when the market recovers.


The main reason for the downward trend in this round of the market is the selling of Mt.Gox and various governments, but the market may be exaggerating its impact.
The market is sometimes slow to respond, slow to the point that real news does not ferment immediately; but sometimes it is sensitive, sensitive to the point of being on edge, thinking that there is “no way back” at the slightest disturbance. But in fact, “the most important factor affecting the future market trend lies in the results of the US election and the expectation of the Fed rate cut.”
The next Fed interest rate meeting (08.01.2024) is about 24 days away
Therefore, for market participants including retail investors and institutions, the best choice now may be to switch from “long-term thinking” to “short-term thinking,” operating within 6 hours or even 4 hours and 2 hours, leaning more towards trend trading, rather than obsessing over the unanswerable question of “whether Bitcoin and the market as a whole are in a bull market.”
In summary, it’s 16 words—understand the situation, give up fantasies, engage in short-term operations, and wait quietly for favorable news.
In short, long-term investors can stay put and don’t need to enter with large funds in a hurry unless there is a sharp drop. However, it’s a good choice to enter a bottom position now, or those with light positions can add some positions appropriately. Take profits for short-term gains first, as the market is not clear at the moment. If the market reverses, you can re-enter at an opportune time.
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