Don't blindly believe in Bitcoin's 120-day moving average

Recently, I've noticed that many big players' circles are using the MA120 strategy for timing the market with Bitcoin, which I find quite puzzling.

First, let me explain what a moving average strategy is: it means holding Bitcoin when the price is above the 120-day moving average, and staying in cash when it's below.

This is a simple and effective strategy because Bitcoin has clear bull and bear cycles with relatively smooth trends, so a basic moving average strategy can improve returns.

However, I don't recommend this strategy because it's too counterintuitive. Once you encounter prolonged sideways consolidation, you'll end up constantly buying high and selling low, incurring significant slippage. Even though each trade only loses a little, frequent stop-losses are hard to accept.

For example, in the second half of 2024, the price kept crossing the MA120, which would lead to frequent high-buy-low-sell scenarios.

So from this perspective, it's actually not a good strategy—not because it's ineffective, but because it's too counterintuitive. A single, simple strategy rarely yields good results.

Moreover, using a moving average strategy for other assets is understandable because they lack clear patterns. But using it for Bitcoin? Isn't that a waste of its potential? After all, Bitcoin's bull and bear cycles are so obvious, and it's easy to buy low and sell high based on the 4-year cycle.

Why go the long way around and use a moving average strategy? I don't get it.

So how should we time the market? I take a comprehensive approach. The most important factor is the 4-year cycle, which is the time dimension. Next is the spatial dimension, comparing the gains in bull markets and the losses in bear markets, followed by technical patterns, market sentiment, and on-chain data.

Looking at all these factors together yields much better results than relying solely on moving averages.

Finally, many people ask me if the bull market is back or if the bear market is still here. The previous article made it very clear: the decline will continue.

Buying Bitcoin on October 6, 2026, will be your closest opportunity to financial independence. The crypto market is in a bear market, and there are still 161 days left until the bottom of this Bitcoin bear cycle.

Bitcoin price at the time of posting: $76,000

Original article link:《https://mp.weixin.qq.com/s/M0IN31zWtda9vlSm1vAwaA》

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