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Buying Bitcoin Now Is Good Idea, Explains Economist

Sun, 07/31/2022 - 12:00
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Arman Shirinyan
This indicator might help decide when to invest in Bitcoin, according to fund manager
Buying Bitcoin Now Is Good Idea, Explains Economist
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Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

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The economist and fund manager Dan Tapiero, who has more than 25 years of experience, shared his opinion on the best time to buy Bitcoin for a long-term retail investor who is willing to gain exposure to the digital asset market.

Tapiero offers investors a Puell Multiple indicator, which divides the daily coin issuance of BTC by the one-year moving average. The math behind the indicator is not the most important thing here, as the indicator's performance says it all.

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The last 4 times, the Puell Multiple showed the correct point of each reversal on the market, including the $3000 BTC plunge in 2018 that would bring an enormous profit to anyone who made a purchase right at the bottom and then sold at the most recent ATH of $69,000.

Bitcoin chart
Source: Tradingview

The average investment horizon by using this indicator would be around 18 months, after which the indicator enters a "red zone" and Bitcoin hits a reversal. It is interesting to note that Multiple has also correctly shown local bottoms of each correction cycle, which means that it can even be used by midterm traders and investors.

What is happening to Bitcoin now?

A variety of different indicators are showing that the bottom is near, and that BTC will recover in upcoming months. Unfortunately, factors around the digital asset market show the opposite. While the aforementioned indicators have reached the bottoming zone, Bitcoin itself might remain in the consolidation range for a few more months.

In previous downtrends, Bitcoin was consolidating at the local bottom for a few weeks or even months before entering a new uptrend. This time, we might see the same result until the FED eases up on the monetary policy in the country.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.