When to buy Bitcoin? Here are some useful pointers

 After the record rise in the price of Bitcoin that began in 2020 and ended in early 2022, the word "crypto" has become an integral part of the global financial vocabulary. Unfortunately, immediately afterwards, the word “crash” was associated with the term.

The price of Bitcoin has fallen more than 70% since January 2022 and many investors are wondering if the time has finally come to buy Bitcoin . In truth, no one can say for sure when and if the mega bullish trend of cryptocurrencies will begin. However, what you can do to better orient yourself in your investment choices is to contextualize the current situation with descriptive technical indicators of Bitcoin's performance. Among the most common and used are the 4-year simple moving average and the 12-month RSI .

The 4-year simple moving average

The 4-year simple moving average, commonly known as the acronym SMA 1458, is as simple as it is statistically effective . Generally speaking, the moving average is widely used in technical analysis to visualize the underlying price trend by eliminating the noises that intrinsic volatility draws on candlestick charts.

The trend of Bitcoin has been growing overall since the day of its birth and is governed by a well-marked trend, like a clock.
A historically very effective yardstick for identifying low points in downtrends has always been this indicator. The price has in fact in most cases rebounded near the SMA 1458 creating textbook reversals. In 2015 it managed to support the price twice in a row. The same goes for 2019, the year that preceded the recent explosion of the crypto sector. Michael Saylo, a well-known entrepreneur and industry expert, said on Twitter that this indicator, as simple as it is, is the best to navigate the Bitcoin cycle narrative.

Currently, the price has broken down the 4-year moving average, breaking its all-time high. This means that Bitcoin's dollar value is heading to levels even below the value of the SMA 1458 .

The 12-month RSI

RSI is also a very well known and used indicator in the world of traditional finance. It is commonly applied to identify overbought and oversold areas by correlating it to the graphical trend of a stock.
In this case the RSI is set at 12 months thus giving a clear picture of the current situation compared to the previous year. It is easy to graphically see how the value of the Relative Strength Index has reached lower values ​​than the lows of the last 10 years . This represents another particularly relevant graphic anomaly.

RSI - 12 periods, 1 month Graphical trend of the 12-period RSI indicator on a monthly timeframe

What do these indicators tell us about Bitcoin?

For a trader these data are of little importance if not from an orientation point of view: the trend continues to be decreasing and therefore it is typically preferable and statistically (potentially) convenient to look for short trades.
But different logics come into play for an investor. These data indicate that the price of Bitcoin has entered a zone that has been statistically indicative of depth in the past . Over the past 10 years, buying near these levels has proved to be a beautiful operation. An investor confident in Bitcoin's price growth and with a sufficiently long time horizon could therefore see these prices as an opportunity rather than a weakness characterizing the sector.

Likewise, aware of the mantra that " rules are made to be broken ", one must take into consideration the fact that history may not repeat itself this time. In this case, the investor would undoubtedly end up making a bad investment.
It is indeed not to be underestimated that in the past the price of Bitcoin has even come to have collapses of more than 80% , so there may still be room to go down.

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