Suppose you are extremely bullish.
Suppose it is not possible to accurately pinpoint tops and bottoms.
Suppose it is not even possible to reliably determine the start and the end of a longer term uptrend.
Consequently, you'll have to use some methodology to guess entries and exits which will more likely than not be wrong. In the sense that prices do not follow your initial expectation. Of course, you can use a stop loss and a re-entry. But this is very tedious and unless you have military discipline to rigorously follow technical signals, or a damn good trading robot, you'll either lose money or your results will be at best suboptimal. Alternatively, you can simply look at a chart and say: prices are low enough for me now! And if it turns out they drop lower, you might want to buy more of them. Unfortunately, you'll meet the same problem when exiting your position. Much better than an educated guess where a good exit might be, it will never become.
In short, technical analysis may be profitable, but it will not make you rich. What will make you rich is buy & hold and add to your existing position. Grow that position! That is, of course, assuming the crypto markets will continue to go up.
There are basically 2 ways to increase your position.
Obviously, with the second option, you'll run into collision with one of the three premises above: it is impossible to accurately pinpoint tops and bottoms.
Dollar cost averaging is the safer option of the two. You don't have to worry about dips, nor about missing them and the subsequent bull run (worse than an unfavourable entry). Yes, you will be buying at tops, during downtrends, but it doesn't really matter as you keep building your position which will become more valuable pretty soon.
To give an example I found this article (https://medium.com/@homeytel/dollar-cost-averaging-update-ae81204ae272) by someone who calls himself Ugly Old Goat. As the example above shows he tested investing 500$ per month starting January 15, 2014 and kept doing so until March 15, 2019. In total he spent 31,500 USD on BTC. His total, hypothetical BTC holding has now (March 2019) a value of more than 200,000 USD. In December 2017, at the very top, he had almost 50 BTC for a total value of over 800,000 USD. I guess you must be one devil of a trader if you can improve on that very easy strategy. Note also that the test started in January 2014 when BTC traded over 800 USD, only to drop to 200 USD over the following months. So, the entry was quite near the previous all-time high of over 1100 USD.
Now, last time I posted a chart of the so-called 'Stock to Flow' model which tracks/predicts bitcoins prices pretty accurately. What can be seen rather clearly is that, in each four year cycle of bitcoin halvings, prices start moving up roughly one year before the halving and top out roughly one year after the halving. So prices go up for two years and then down for two years. By the way, the next halving will be in May 2020. That's about one year away. So, we could be moving up soon. Although my charts would be better aligned if we were to drop to 3000$ first the coming two months; despite the fact that the markets generally speaking never seem to be very interested in the alignments of my charts.
Nonetheless, it seems very tempting to try and combine the 'Stock to Flow' model with the dollar cost averaging strategy but it's not so clear how this can be done intelligently, especially since the dollar cost averaging strategy looks pretty spectacular in itself already.
You can f.i. start buying one year before the halving and stop buying after the halving. Enjoy the ride up and enjoy the ride down until you again start buying during one year before the next halving. Maybe you can improve on this by converting your trading profits to gold one year after the halving and convert that back into bitcoin 2 years later.
That seems possible and is possibly quite profitable, provided you invest four times as much during the one year before the halving in order to match the same amount you would normally have invested if spread over 4 years. But more importantly, it does require an almost religious believe in the 'Stock to Flow' model which does not seem to be fully justified at this point.
Another possibility may be to convert some bitcoins into popular altcoins, starting one year before the halving, and when you feel the top of the cycle is approaching, convert them back into bitcoin as altcoins both rise and fall faster. This way you can have some additional protection during the bust and some additional profit during the boom.
Anyway, we have established that technical analysis has its uses but less so for a pumping long term bull market of paradigm shift magnitude. Then it's just buy and hold and buy more following a simple dollar cost averaging strategy. That's good enough already, although it may be possible to improve upon it by intelligently incorporating the 'Stock to Flow' model. Some more thoughts are needed there. What also has become clear: it is never too late. I'm going to start soon myself.
