The pattern that indicates when is the best time to buy or sell bitcoins

pattern that indicates when is the best time to buy or sell bitcoins

After a few months of high volatility, where bitcoin reached over $60,000 in April, the famous cryptocurrency has managed to stabilize in recent times with values ​​above but always close to $30,000.

A value for which analysts in the cryptographic industry bet as a great foothold, attending to the options markets and the movements of investors. Right now, the price of bitcoin is moving around $32,000.

For Nicholas Colas, co-founder of DataTrek Research, there is a pattern that allows knowing the best time to buy or sell bitcoins. The analyst analyzed the moving average of price deviation for the last 100 days  since 2014 and found that buying when volatility is high is not recommended. On the other hand, when volatility is low, it usually gives the investor a return.

In short, buying when the volatility of bitcoin moves only 2 or 3% on average in the last 100 days tends to ensure profits, while when it is high it is time to sell. As he explains, the volatility of the last 100 days is still higher than 3%, which means that it is not so low as to bet in the most sensible way on an investment.

“It is worth noting that this pattern is the exact opposite of what we see in stocks,” Colas added. “Also, as market capitalization increases, you generally see less volatility. That is not the case for bitcoin,” he adds.

“Bitcoin needs to be ‘boring’ [low volatile] to create a sensible entry point for a long-term trade or investment that doesn’t produce stomach-churning volatility in the short term. The good news from the historical record is that that day will come,” he concludes.