02-24-2022, 12:03 AM
You hear advice like buy the dip, but does it really work? Here I run a simulation f
<!-- SC_OFF --><div class="md"><p>There is no doubt that the overall market is down right now. For example take a look at BTC and ETH and their value relative to their ATH. Yikes. </p> <table><thead> <tr> <th align="left">name</th> <th align="left">% Price Drop from ATH</th> <th align="left">date since ATH</th> </tr> </thead><tbody> <tr> <td align="left">BTC</td> <td align="left">-44.56%</td> <td align="left">3 months ago</td> </tr> <tr> <td align="left">ETH</td> <td align="left">-45.76%</td> <td align="left">3 months ago</td> </tr> </tbody></table> <p><strong>historically these type of level of drop has occurred 15 times for BTC and about 20 for ETH.</strong></p> <p><strong>And now the question is for people who DCA ( buy once a week ) is it worth to purchase more during the this time?</strong> The likely answer is probably yes but here I wanted to not just based on intuition but simulate what would happen. </p> <p><strong>Method:</strong> </p> <p>I basically have the investment set at 100 USD to purchase every week on Wednesday. If the coin drops below -40% from its 90 day ATH then it increases that by 50%(150.00) or the investment increases by 25% (125) when it drop to -20%. </p> <p>I used the coinbase API so the furthest data I an get is 2016 so I can only start there. </p> <p><strong>Results:</strong></p> <p>BTC</p> <table><thead> <tr> <th align="left">year</th> <th align="left">total_profit</th> <th align="left">adjusted profit</th> <th align="left">difference</th> </tr> </thead><tbody> <tr> <td align="left">2016</td> <td align="left">260,469</td> <td align="left">270,736</td> <td align="left">10,267</td> </tr> <tr> <td align="left">2017</td> <td align="left">98,188</td> <td align="left">102,467</td> <td align="left">4,279</td> </tr> <tr> <td align="left">2018</td> <td align="left">25,906</td> <td align="left">34,272</td> <td align="left">8,366</td> </tr> <tr> <td align="left">2019</td> <td align="left">28,746</td> <td align="left">33,950</td> <td align="left">5,204</td> </tr> <tr> <td align="left">2020</td> <td align="left">16,201</td> <td align="left">17,558</td> <td align="left">1,357</td> </tr> <tr> <td align="left">2021</td> <td align="left">-573</td> <td align="left">-519</td> <td align="left">54</td> </tr> <tr> <td align="left">2022</td> <td align="left">0</td> <td align="left">4</td> <td align="left">4</td> </tr> <tr> <td align="left">Total</td> <td align="left">428,937</td> <td align="left">458,468</td> <td align="left">29,531</td> </tr> </tbody></table> <p>ETH </p> <table><thead> <tr> <th align="left">year</th> <th align="left">total_profit</th> <th align="left">adjusted profit</th> <th align="left">difference</th> </tr> </thead><tbody> <tr> <td align="left">2016</td> <td align="left">558,647</td> <td align="left">731,171</td> <td align="left">172,524</td> </tr> <tr> <td align="left">2017</td> <td align="left">318,000</td> <td align="left">330,920</td> <td align="left">12,920</td> </tr> <tr> <td align="left">2018</td> <td align="left">45,519</td> <td align="left">66,788</td> <td align="left">21,269</td> </tr> <tr> <td align="left">2019</td> <td align="left">84,994</td> <td align="left">103,985</td> <td align="left">18,991</td> </tr> <tr> <td align="left">2020</td> <td align="left">56,251</td> <td align="left">65,868</td> <td align="left">9,617</td> </tr> <tr> <td align="left">2021</td> <td align="left">1,024</td> <td align="left">1,200</td> <td align="left">176</td> </tr> <tr> <td align="left">2022</td> <td align="left">-9</td> <td align="left">-4</td> <td align="left">5</td> </tr> <tr> <td align="left">Total</td> <td align="left">1,064,426</td> <td align="left">1,299,928</td> <td align="left">235,502</td> </tr> </tbody></table> <p>Caveat is that its not completely accurate because on those week that are off below the threshold more money is invested while the base control is not, however I ignore this because I'm trying to stimulate a real situation in which you would simply put in more money. </p> <hr/> <p>TLDR: the bottom line is increasing the amount of DCA during drops are useful. In this example with a 100 dollar investment per week the difference for BTC is 30K while for ETH its about 235K. </p> <p>TLDR2: regardless however, even if you just stuck to the 100 USD per week for BTC the net is still 428K and 1 million for ETH. </p> <p>Happy DCA'ing and investing. </p> <p>And remember past result does not guaranteed future returns but it does leave a bit of clue that we can go on.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/greenappletree"> /u/greenappletree </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/sz3ljr/you_hear_advice_like_buy_the_dip_but_does_it/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/sz3ljr/you_hear_advice_like_buy_the_dip_but_does_it/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>There is no doubt that the overall market is down right now. For example take a look at BTC and ETH and their value relative to their ATH. Yikes. </p> <table><thead> <tr> <th align="left">name</th> <th align="left">% Price Drop from ATH</th> <th align="left">date since ATH</th> </tr> </thead><tbody> <tr> <td align="left">BTC</td> <td align="left">-44.56%</td> <td align="left">3 months ago</td> </tr> <tr> <td align="left">ETH</td> <td align="left">-45.76%</td> <td align="left">3 months ago</td> </tr> </tbody></table> <p><strong>historically these type of level of drop has occurred 15 times for BTC and about 20 for ETH.</strong></p> <p><strong>And now the question is for people who DCA ( buy once a week ) is it worth to purchase more during the this time?</strong> The likely answer is probably yes but here I wanted to not just based on intuition but simulate what would happen. </p> <p><strong>Method:</strong> </p> <p>I basically have the investment set at 100 USD to purchase every week on Wednesday. If the coin drops below -40% from its 90 day ATH then it increases that by 50%(150.00) or the investment increases by 25% (125) when it drop to -20%. </p> <p>I used the coinbase API so the furthest data I an get is 2016 so I can only start there. </p> <p><strong>Results:</strong></p> <p>BTC</p> <table><thead> <tr> <th align="left">year</th> <th align="left">total_profit</th> <th align="left">adjusted profit</th> <th align="left">difference</th> </tr> </thead><tbody> <tr> <td align="left">2016</td> <td align="left">260,469</td> <td align="left">270,736</td> <td align="left">10,267</td> </tr> <tr> <td align="left">2017</td> <td align="left">98,188</td> <td align="left">102,467</td> <td align="left">4,279</td> </tr> <tr> <td align="left">2018</td> <td align="left">25,906</td> <td align="left">34,272</td> <td align="left">8,366</td> </tr> <tr> <td align="left">2019</td> <td align="left">28,746</td> <td align="left">33,950</td> <td align="left">5,204</td> </tr> <tr> <td align="left">2020</td> <td align="left">16,201</td> <td align="left">17,558</td> <td align="left">1,357</td> </tr> <tr> <td align="left">2021</td> <td align="left">-573</td> <td align="left">-519</td> <td align="left">54</td> </tr> <tr> <td align="left">2022</td> <td align="left">0</td> <td align="left">4</td> <td align="left">4</td> </tr> <tr> <td align="left">Total</td> <td align="left">428,937</td> <td align="left">458,468</td> <td align="left">29,531</td> </tr> </tbody></table> <p>ETH </p> <table><thead> <tr> <th align="left">year</th> <th align="left">total_profit</th> <th align="left">adjusted profit</th> <th align="left">difference</th> </tr> </thead><tbody> <tr> <td align="left">2016</td> <td align="left">558,647</td> <td align="left">731,171</td> <td align="left">172,524</td> </tr> <tr> <td align="left">2017</td> <td align="left">318,000</td> <td align="left">330,920</td> <td align="left">12,920</td> </tr> <tr> <td align="left">2018</td> <td align="left">45,519</td> <td align="left">66,788</td> <td align="left">21,269</td> </tr> <tr> <td align="left">2019</td> <td align="left">84,994</td> <td align="left">103,985</td> <td align="left">18,991</td> </tr> <tr> <td align="left">2020</td> <td align="left">56,251</td> <td align="left">65,868</td> <td align="left">9,617</td> </tr> <tr> <td align="left">2021</td> <td align="left">1,024</td> <td align="left">1,200</td> <td align="left">176</td> </tr> <tr> <td align="left">2022</td> <td align="left">-9</td> <td align="left">-4</td> <td align="left">5</td> </tr> <tr> <td align="left">Total</td> <td align="left">1,064,426</td> <td align="left">1,299,928</td> <td align="left">235,502</td> </tr> </tbody></table> <p>Caveat is that its not completely accurate because on those week that are off below the threshold more money is invested while the base control is not, however I ignore this because I'm trying to stimulate a real situation in which you would simply put in more money. </p> <hr/> <p>TLDR: the bottom line is increasing the amount of DCA during drops are useful. In this example with a 100 dollar investment per week the difference for BTC is 30K while for ETH its about 235K. </p> <p>TLDR2: regardless however, even if you just stuck to the 100 USD per week for BTC the net is still 428K and 1 million for ETH. </p> <p>Happy DCA'ing and investing. </p> <p>And remember past result does not guaranteed future returns but it does leave a bit of clue that we can go on.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/greenappletree"> /u/greenappletree </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/sz3ljr/you_hear_advice_like_buy_the_dip_but_does_it/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/sz3ljr/you_hear_advice_like_buy_the_dip_but_does_it/">[comments]</a></span>Kind Regards R