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Introduction
In this article, I will share my Bitcoin (BTC) investment plan for Q1 2023, its performance, and the strategies I used to maximize profits, specifically Dollar-Cost Averaging (DCA) and Fibonacci retracements. We’ll dive into my buying strategy, selling plans, lessons learned, and a transparent breakdown of my investments, complete with charts and spreadsheet.
Section 1: Building the Investment Plan
1.1 Dollar-Cost Averaging (DCA)
Dollar-Cost Averaging (DCA) is an investment strategy in which an investor divides their total investment amount into periodic purchases of an asset, regardless of its price. By investing consistently over time, the investor can reduce the impact of price volatility on their portfolio. I used DCA to make consistent purchases of Bitcoin throughout Q1 2023.
1.2 Fibonacci Retracements
Fibonacci retracements are a technical analysis tool that helps identify potential support and resistance levels based on the golden ratio (0.618). I used the 0.618 Fib retracement level to determine when to start investing in Bitcoin, targeting a 60% discount from its all-time high (ATH) reached in November 2021. I set my buy levels accordingly, aiming to invest more as the price dropped further below the Fib level.
Section 2: Execution of the Investment Plan
2.1 Buying Strategy
My Q1 2023 buying strategy involved the following investments:
- $100 per week when the price was below $25K
- $200 per week when the price was below $20K
- $400 per week when the price was below $15K (although this level wasn’t reached in Q1)
I only invested when the conditions were met, such as not investing in late March when the price was above $25K.
2.2 Charts and Spreadsheet
To better visualize my investment strategy, I have included annotated charts showing the buy zones, and executed buy orders:
Additionally, I’m sharing spreadsheet that display my purchases, investments, and profits:
Section 3: Performance of the Investment Plan
3.1 Profits and Growth
During Q1 2023, my Bitcoin investment plan resulted in a total profit of 38.88%, with an initial investment of $1,400 and a current value of $1,944.34. The BTC price at the end of Q1 was $28,485.
3.2 Selling Plans
I have devised two selling plans for my Bitcoin investment:
- Sell everything in 2025, a year after the halving, aligning with the 4-year Bitcoin cycle.
- Sell half when the price doubles my average investment (above $41,020) before November 2023, taking profits during a potential rally, and reinvesting when the price drops later.
These plans are informed by my expectations for potential price movements, such as a rally similar to the one experienced in 2019.
Conclusion
The key takeaways from my Q1 2023 Bitcoin investment plan include the effective use of DCA and Fibonacci retracements to maximize profits during a volatile period. By sharing my experiences, I hope to inspire others to apply these strategies to their investment plans and encourage them to share their experiences and engage with my content on Twitter and Medium.
Please note that this article is not financial advice but a demonstration of best practices in the context of my personal investment strategy.
As you embark on your own investment journey, remember that using tools like DCA and Fibonacci retracements can help you navigate market volatility and make more informed decisions. However, always conduct thorough research and consider your risk tolerance before making any investment.
Thank you for taking the time to read this article, and I look forward to hearing your thoughts and experiences. Don’t forget to follow me on Twitter and Medium for more insights, tips, and investment ideas.
Happy investing!
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