A key technical indictor acurrately predicts the best moments to accumulate bitcoin. Source: Shutterstock
It’s easy to get scared away by the daily volatile movements of bitcoin. Over the weekend, bitcoin jumped 20 percent in a matter of days. Since then, BTC shed over $1,000 before recovering slightly again. It’s a volatile market.
But zoom out for a moment and you’ll see the bigger picture. This chart, shared by on-chain analyst Willy Woo, pinpoints the best windows of opportunity to buy bitcoin for the long term.
Using what’s called the ‘ribbon difficulty’ indicator laid across the long-term logarithmic bitcoin chart, it has historically predicted the best moments to get exposure to bitcoin over the last ten years.
Introducing the Bitcoin Difficulty Ribbon. When the ribbon compresses, or flips negative, these are the best time to buy in and get exposure to Bitcoin. The ribbon consists of simple moving averages on mining difficulty so we can easily see the rate of change in difficulty. pic.twitter.com/6kBz4sLG1d
— Willy Woo (@woonomic) August 1, 2019
So next time you’re about to FOMO into the market, zoom out and take note of this chart.
The best time to buy bitcoin?
According to Willy Woo’s analysis, the perfect moment to accumulate bitcoin is when the difficulty ribbon compresses (gets very thin) or flips negative (when the strong, dark line crosses above the weaker lines), shown below.
The indicator accurately predicted the bottom of the market in late 2018, early 2019. Smart investors should have started accumulating at this point (many hedge funds were).