Bitcoin’s price goes up and down like crazy. How do you know whether an upswing marks the top of the market? When we get a downswing, how do you know whether it’s a dip or the start of a cycle-ending crash?

Nobody knows, but if you have the right data, you can get a pretty good idea.

Fortunately, smart people have gathered lots of data on bitcoin. More specifically, how bitcoin acts in different circumstances.

Thanks to the transparency of bitcoin’s blockchain, we can see changes in HODLing behaviors, money entering and leaving exchanges, gains and losses among bitcoin wallets, and lots of other information about long-term price movements.

We can use that data to get a good idea of what to expect in certain situations. With that data, I designed a plan for myself and other long-term investors to spot market tops and bottoms with a fair amount of confidence.

The goal is to build wealth with crypto without a lot of effort, stress, or trying to time the market. Sell only as a last resort.

While the price action can get quite extreme—up 50% or more after seeing signs of a peak, down 50% or more after seeing signs of a bottom—this is an extreme market. You have to give some margin for error. Close enough is good enough.

More on that below.

Backtesting the Plan

If you had followed my plan in 2017, you would have sold half of your Bitcoin at about $16,000 and the rest over several weeks, catching the market cycle peak of $20,000.

If you had followed my plan in November 2013, you would have sold half of your Bitcoin at about $760 and the rest over several weeks, catching the market cycle peak of $1,150.

If you had followed my plan in March 2013, you would have sold half of your Bitcoin at about $133 and the rest over several weeks, catching the market cycle peak of $260.

You wouldn’t have enough data to follow my plan in 2011, but if you’d just followed the “sell” signals, you’d have sold just before and after the peak.

In other words, you would have sold only when the price was in the circles:

In addition, you would’ve caught every market bottom, though you would have bought most of your bitcoin at a price that was higher than the ultimate bottom.

You would not have sold in 2021 but you also would have not bought most of the time. For the entirety of that year, your average price would have been about $37,000 assuming you bought the same amount each day that bitcoin’s price was in my buying zone.

(Dollar-cost averaging would have given you an average price of $47,000. Following my plan, you got 30% more bitcoin for the same amount of money.)

What my plan can and can’t do

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