You hear advice like buy the dip, but does it really work? Here I run a simulation for 2016 to present to find out.

There is no doubt that the overall market is down right now. For example take a look at BTC and ETH and their value relative to their ATH. Yikes.

| name | % Price Drop from ATH | date since ATH |
| BTC | \-44.56% |3 months ago|
| ETH |\-45.76% | 3 months ago|

__historically these type of level of drop has occurred 15 times for BTC and about 20 for ETH.__

__And now the question is for people who DCA ( buy once a week ) is it worth to purchase more during the this time?__ The likely answer is probably yes but here I wanted to not just based on intuition but simulate what would happen.


I basically have the investment set at 100 USD to purchase every week on Wednesday. If the coin drops below -40% from its 90 day ATH then it increases that by 50%(150.00) or the investment increases by 25% (125) when it drop to -20%.

I used the coinbase API so the furthest data I an get is 2016 so I can only start there.



|year |total_profit |adjusted profit |difference |
|2016 |260,469 |270,736 |10,267 |
|2017 |98,188 |102,467 |4,279 |
|2018 |25,906 |34,272 |8,366 |
|2019 |28,746 |33,950 |5,204 |
|2020 |16,201 |17,558 |1,357 |
|2021 |-573 |-519 |54 |
|2022 |0 |4 |4 |
|Total |428,937 |458,468 |29,531 |


|year |total_profit | adjusted profit |difference |
|2016 |558,647 |731,171 |172,524 |
|2017 |318,000 |330,920 |12,920 |
|2018 |45,519 |66,788 |21,269 |
|2019 |84,994 |103,985 |18,991 |
|2020 |56,251 |65,868 |9,617 |
|2021 |1,024 |1,200 |176 |
|2022 |-9 |-4 |5 |
|Total |1,064,426 |1,299,928 |235,502 |

Caveat is that its not completely accurate because on those week that are off below the threshold more money is invested while the base control is not, however I ignore this because I’m trying to stimulate a real situation in which you would simply put in more money.
TLDR: the bottom line is increasing the amount of DCA during drops are useful. In this example with a 100 dollar investment per week the difference for BTC is 30K while for ETH its about 235K.

TLDR2: regardless however, even if you just stuck to the 100 USD per week for BTC the net is still 428K and 1 million for ETH.

Happy DCA’ing and investing.

And remember past result does not guaranteed future returns but it does leave a bit of clue that we can go on.

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37 thoughts on “You hear advice like buy the dip, but does it really work? Here I run a simulation for 2016 to present to find out.”

  1. Can you do a sim where you don’t DCA and instead only bulk buy the dip median? Basically whatever you would have spent at $100 per week between major dips is the buy amount halfway down the dip (because you can’t time a top or bottom).

  2. I’d rather “buy the dip” then FOMO in at the top.

    But DCA is what I actually do (like OP suggests). And I prefer DCA because it gives structure to the unstructured.

  3. This is helpful but I don’t know if people have 30k to invest in crypto over the years lol. I think the key is what is the next ethereum level hold over the coming 5-6 years?

  4. The problem with most crypto investors is that they go all in during the bull market. So while they might dca during the bear market, the amount of money that they are dcaing is so much less than what they went in during the bull market. and as such, their average cost just cannot get down fast enough to reap large benefits from dcaing during the bear market.

  5. This is good analysis but the numbers for eth are very misleading because the timeline is way too long. Basically you are starting in 2016 when eth was $1. I’d challenge you to go “reverse” the analysis for something like buy high, only after a massive spike, etc. however way you want to define it, doesnt matter because you will still get returns in the order of 100,000%.

  6. **Basically buying the dip does work it’s just if you can really HODL through all the volatility and keep yourself emotionally stable is the real question!**

  7. I enjoy lost like this, it puts things back into perspective. Sure looking at the sea of red right now is painful. But in the long run it will pay off

  8. I don’t need a sim to tell me a coin that’s normally at $5 dips to $1.50 that it’s probably a good idea to buy some.

  9. If I had begun weekly $100 DCA into ETH in Jan 2016 that would be $5200 total investment by the end of Dec 2016 and the total profit would be $558,647!

    Do I understand this correctly?

  10. Over time it works, buy anything at anytime and it will be better than holding an inflated asset.

    But consistently making money there’s only one way: training (trading)

    Few weeks ago I turned a dust account $36 to $768 in a day just by scalping Luna. Just educate yourself on day trading, pays out nicely if you do it right.

    A lot of people are commonly mistaking that trading (long or short term) and making money in crypto requires high budget. Nope. It requires a 💩load of time, education, dedication, and self control. Just like any other profession.

    FYI I also hold a full time job as full stack dev, so dedicating time for trading gives me a full no-sleep schedule on top of being a new parent. No excuses 😌

    Edit: I have posted this on Twitter before I finish the day

  11. I’ve been DCA once a week. Running low however but will continue to DCA with the little funds I got leftover each week, but this is very helpful to increase my confidence. thanks.


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