Bitcoin DCA Entry Point: A Strategic Opportunity Emerges as Key Metric Nears

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Bitcoin DCA Entry Point: A Strategic Opportunity Emerges as Key Metric Nears

Global cryptocurrency markets are closely monitoring a critical technical level as Bitcoin, the world’s leading digital asset, approaches what analysts identify as a potentially optimal entry zone for long-term investors employing the dollar-cost averaging strategy. According to a recent technical analysis, BTC is nearing its 720-day simple moving average, a historically significant support line currently positioned around $86,000. This development arrives amidst a complex macroeconomic landscape in early 2025, marked by shifting geopolitical trade policies.

Understanding the Bitcoin DCA Entry Point Strategy

Dollar-cost averaging represents a disciplined investment approach where an investor allocates a fixed amount of capital at regular intervals, regardless of the asset’s price. This method systematically reduces the impact of volatility by purchasing more units when prices are low and fewer when prices are high. Consequently, identifying periods where an asset trades below its long-term average cost basis can enhance the strategy’s effectiveness. Historical blockchain data reveals that Bitcoin’s 720-day moving average has frequently acted as a robust foundation during previous market cycles, often preceding extended accumulation phases.

For instance, after the 2018 bear market, BTC consolidated around its long-term moving averages for several months before initiating its next major bull run. The current market structure shows Bitcoin has traded below most of its key moving averages since November 2024, a condition that often signals late-stage bear market exhaustion. Now, as the price converges with this final major average, quantitative analysts are highlighting the statistical significance of this convergence for strategic portfolio building.

Deciphering Bullish Signals Amidst Market Stagnation

Beyond the simple moving average, the analysis from BeInCrypto points to two additional, seemingly counterintuitive, bullish indicators. First, network growth metrics have decelerated to multi-year lows. While a shrinking growth rate typically suggests waning adoption in the short term, blockchain historians note that similar periods of stagnation have consistently preceded major valuation rallies. This pattern suggests that phases of quiet consolidation often weed out speculative participants, leaving a stronger, more committed holder base.

• Reduced Exchange Inflows: Data from major trading platforms shows a dramatic decline in selling pressure from large holders, often called “whales.” Monthly Bitcoin deposits to exchanges from this cohort have plummeted from approximately $8 billion in late November 2024 to roughly $2.74 billion currently.
• Supply Shock Dynamics: This reduction in available sell-side liquidity, combined with steady demand from ETFs and recurring buy programs, can create a supply shock, a fundamental driver of price appreciation.

Furthermore, on-chain metrics like the MVRV Z-Score and Puell Multiple, which compare market value to realized value and mining revenue, are also hovering near levels historically associated with long-term buying opportunities. These data points collectively paint a picture of a market transitioning from a distribution phase to a potential accumulation phase.

Macroeconomic Headwinds: The Unavoidable Variable

Despite these encouraging on-chain signals, the analysis includes a necessary caution regarding external macroeconomic factors. The primary risk cited is the potential resumption of global tariff wars amid ongoing geopolitical tensions. Such developments can trigger risk-off sentiment across all financial markets, including cryptocurrencies. Rising interest rates, inflation data, and central bank policy statements in 2025 will continue to influence capital flows and investor risk appetite.

Historically, Bitcoin has experienced heightened correlation with traditional risk assets like the NASDAQ during periods of macroeconomic uncertainty. Therefore, while the technical and on-chain setup appears constructive for strategic entry, investors must weigh this against the broader fiscal and monetary policy landscape. A prudent approach involves acknowledging that cryptocurrency markets do not operate in a vacuum and remain susceptible to global liquidity conditions.

The Anatomy of the 720-Day Moving Average

The 720-day (approximately two-year) simple moving average is not an arbitrary line on a chart. It represents the average closing price of Bitcoin over the past two years, effectively reflecting the consensus cost basis for medium-to-long-term holders. When the price trades significantly above this line, it indicates broad profitability and potential for profit-taking. Conversely, trading at or below this line suggests the average holder over the last two years is at a break-even or loss, which historically has limited motivated selling.

Historical Precedents:

• 2015: BTC found a multi-year bottom after testing its long-term moving average, followed by a multi-year bull market.

• 2019: A decisive break above the 720-day MA confirmed the end of the 2018 bear market.

• 2023: The price respected this level as support during the consolidation following the FTX collapse.

This repeated respect gives the level its psychological and technical weight, making its current test a focal point for institutional and retail analysts alike. The convergence of price with this mean often signifies a period of value discovery, where emotion-driven selling subsides and fundamental valuation models regain relevance.

Expert Perspectives on Strategic Accumulation

Market strategists often differentiate between tactical trading and strategic investing. The current setup, characterized by a convergence of low network growth, high holder conviction, and a test of a long-term cost basis, is typically framed as an environment for the latter. Veteran investors like those managing crypto-native funds often increase their DCA program weights during such technical confluence zones, as the risk-reward ratio shifts favorably for multi-year horizons.

They emphasize that the goal of DCA at such a juncture is not to time the absolute bottom—a notoriously difficult endeavor—but to build a position at a favorable average cost before the next network-driven valuation cycle begins. This philosophy aligns with the data showing reduced exchange deposits, suggesting that sophisticated players are opting to custody assets themselves rather than prepare them for sale, a behavior indicative of long-term confidence.

Conclusion

In summary, Bitcoin’s approach to its 720-day moving average near $86,000 presents a analytically significant moment for investors utilizing dollar-cost averaging strategies. The confluence of a key technical support level, multi-year lows in network growth, and a substantial decline in exchange deposits from large holders creates a compelling, data-driven narrative for strategic accumulation. However, this opportunity exists within a framework of persistent macroeconomic uncertainties, including trade policy and geopolitical risk. For disciplined investors, the current landscape underscores the core principle of DCA: systematically building exposure during periods of fear or stagnation, thereby positioning for potential future growth while mitigating the pitfalls of short-term market timing. The evolving Bitcoin DCA entry point thesis will ultimately be validated by future on-chain activity and price action relative to this pivotal long-term average.

FAQs

Q1: What is dollar-cost averaging (DCA) and why is it relevant now?
A1: Dollar-cost averaging is an investment strategy where a fixed dollar amount is invested at regular intervals, regardless of the asset’s price. It’s relevant now because technical analysis suggests Bitcoin is nearing a long-term historical support level, which could make systematic purchases at this juncture more effective for lowering the average entry cost over time.

Q2: Why is the 720-day moving average considered so important for Bitcoin?
A2: The 720-day (approximately 2-year) moving average represents the average purchase price for holders over a medium-term period. Historically, Bitcoin’s price has found major support or resistance at this level, making it a key benchmark for assessing whether the market is in a long-term bullish or bearish phase. It acts as a proxy for the network’s consensus cost basis.

Q3: How does slowing network growth signal a potential bullish turn?
A3: While counterintuitive, sharply slowing growth in new addresses can indicate a washout of speculative, short-term users. This often leaves a base of more committed, long-term holders who are less likely to sell during volatility. Historically, such periods of stagnation have been followed by renewed growth and price rallies as fundamentals reassert themselves.

Q4: What does a decline in exchange deposits from large holders signify?
A4: A significant drop in Bitcoin being sent to exchanges by large wallets (“whales”) suggests reduced immediate intent to sell. When these major players choose to hold assets in self-custody rather than on trading platforms, it reduces the readily available supply on the market, which can alleviate selling pressure and create conditions for a price increase if demand remains steady or grows.

Q5: What are the main risks to this optimistic DCA entry thesis?
A5: The primary risks are macroeconomic. Factors like escalating geopolitical tensions, the resurgence of trade wars, aggressive central bank interest rate policies, or a broad risk-off sentiment in traditional markets could negatively impact Bitcoin’s price regardless of positive on-chain signals. Cryptocurrency remains a high-risk asset class correlated to global liquidity conditions.

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