Why You Should Not Buy Bitcoin? - Boss Level Finance

Bitcoin has been the headline-grabbing investment of the decade, drawing attention with explosive rallies, painful crashes, and ever-louder narratives about its future. In July 2025, as enthusiasm again runs hot and prices hover near all-time highs, new and seasoned investors alike are asking a tough but essential question: Is now really the right time to buy Bitcoin? Or is it wiser to wait for a retest of the 200-day moving average—or steadily accumulate with every significant dip?

This deep-dive blog post will explore the data-driven reasons for caution at current levels, explain why buying near the 200DMA is a historically sound strategy, and detail Smart Investment Plans (SIPs, or DCA) to help you build a robust bitcoin position for the next cycle.

The Current State of Bitcoin: Where Are We Now?
Understanding the 200-Day Moving Average
Historical Evidence: Why FOMO Buys at Highs Are Risky
A Data-Backed Case for Patience: Buy Near the 200DMA
Strategic Allocation: 70% Bulk Buy, 30% Cash Reserve
SIP/DCA: Alternative Strategy for Volatile Markets
Risks of Buying at Current Levels
Tables and Charts: Price Patterns, 200DMA, & Dips
Implementation: How to Actually Execute These Strategies
Conclusion: Discipline Beats Hype

1. The Current State of Bitcoin: Where Are We Now?

Bitcoin is trading at approximately $118,000–$121,000 as of mid-July 2025, just below its record high of $123,000 set days prior. This marks a staggering 70% climb from January 2025 and puts Bitcoin front and center as one of 2025’s best-performing mainstream assets.

Market Mood:

Bulls are vocal; price targets for $145,000–$150,000 this year and $250,000 by 2026 are everywhere.
Mainstream interest surges during uptrends, and search activity is near 2021–2022 highs.
Institutional flows and ETF demand are widely cited as “game changers.”

2. Understanding the 200-Day Moving Average

The 200-day moving average (200DMA) is one of the most well-respected indicators in all financial markets. It’s calculated by averaging Bitcoin’s daily closing price over the past 200 days, capturing the long-term trend and smoothing out short-term noise.

Why Does It Matter?

Support in Bull Markets: Historically, the 200DMA has acted as a powerful support level in bull cycles, often halting corrections and marking excellent entry points.
Signal for Overheating: When price stretches too far above the 200DMA, both risk and probability of a sharp pullback increase.
Reversion to Mean: Eventually, price movements tend to revert toward the 200DMA, presenting opportunities for disciplined investors.

As of July 2025, Bitcoin is trading well above its 200DMA following a major rally.

3. Historical Evidence: Why FOMO Buys at Highs Are Risky

Recency Bias is powerful. When the chart only points up, it can feel “urgent” to pile in—not wanting to miss out. But looking back at previous bull runs and blow-offs is instructive.

Snapshot: When Buying High Goes Wrong

Historically, each mania has been followed by a correction—often down to or below the 200DMA—before a resumption of the uptrend or, at times, the start of a prolonged bear market.
Those who bought at “peak euphoria” faced significant drawdowns and long waits to break even.

4. A Data-Backed Case for Patience: Buy Near the 200DMA

Key Facts

In July 2025, the 200DMA is estimated to be in the $92,000–$96,000 range—well below current spot prices.
Previous cycles show that buying close to the 200DMA has frequently maximized risk-adjusted returns and protected investors from brutal drawdowns.

Why Wait for the 200DMA?

Bitcoin’s rapid run-ups are often followed by equally sharp reversions.
Even in “forever bull” scenarios, Bitcoin rarely moves up in a straight line; a 10–30% correction from new highs is common.
Buying when price is near or dips below the 200DMA stacks the odds in your favor for long-term compounding.

What If It Doesn’t Come Back to the 200DMA Soon?

Historically, the market gifts at least one major dip (20–35%) every cycle. If you missed the 200DMA, you can always fall back on a disciplined SIP—see below.

5. Strategic Allocation: 70% Bulk Buy, 30% Cash Reserve

For those who prefer not to SIP indefinitely, consider a tiered buying plan:

Plan Outline:

Wait for BTC to approach its 200DMA (or at least a ~20%+ correction from peak).
When it does, invest 70% of your planned allocation in a single, bold buy.
Keep 30% in cash to deploy only if prices move significantly below the 200DMA (further panic/demand shock, black swan, or major global events).
- This dry powder gives you a chance to “buy blood” and calm your nerves during the inevitable scary drawdown.

Why 70/30?

Putting most of your capital to work at a historically strong level, but saving enough cash to avoid feeling helpless if the market goes much lower.
Psychological edge: You are less likely to panic sell if you know you have more ammo to deploy on further declines.

6. SIP/DCA: Alternative Strategy for Volatile Markets

A Systematic Investment Plan (SIP) or Dollar-Cost Averaging (DCA) involves investing a fixed amount at regular intervals, regardless of the asset’s current price.

Advantages

Reduces Timing Risk: No need to predict the perfect entry.
Volatility Becomes Your Friend: You buy more when prices are low and less when prices are high.
Disciplined Investing: Reduces emotional decision-making, preventing FOMO buys and panic sells.

Example: SIP vs. Lump-Sum

*Actual returns may vary. SIP smooths out the impact of big drops and euphoric surges.

SIP on Every Downfall

To juice returns, implement SIP “triggers”:

Double your SIP amount whenever Bitcoin drops 15% or more from recent highs.
Stick to a monthly baseline, but deploy more if a “flash crash” occurs.

7. Risks of Buying at Current Levels

1. Overbought Conditions:
Bitcoin is currently stretched above its mean, making it highly susceptible to profit-taking and sharp pullbacks.

2. Crowded Trade:
Retail participation and media hype are at their highest when price is at/near record levels. Historically, these are not the points of greatest opportunity.

3. Volatility & Whiplash:
Sharp corrections can happen with little warning—triggered by regulations, whale movements, ETF outflows, or global macro events. Losses of 15–35% in weeks are common, even in ongoing bull markets.

4. Diminishing Short-Term Upside:
Forecasts for 2025 year-end are in the $125,000–$145,000 zone—a 5–20% gain from here, with significant risk if the market pulls back. Is that asymmetric enough for your capital?

8. Tables and Charts: Price Patterns, 200DMA, & Dips

Bitcoin July 2025: Market Key Data

Bitcoin: Typical Corrections in Bull Cycles

SIP vs. Lump-Sum at Highs: Historical Backtest Summary

9. Implementation: How to Actually Execute These Strategies

For Bulk Buyers (70/30 Plan):

Set Alerts:
- Track the BTC 200DMA via reputable charting platforms.
- Define your buy level as price reaching, or falling within 5–10% of, the 200DMA.
Liquidity:
- Secure fiat or stablecoins in advance on your chosen exchange.
Execution:
- When conditions are met, invest 70%.
- Leave 30% for even steeper corrections.
Patience:
- Don’t be lured into deploying your “dip cash” too early.

For SIP/DCA Investors:

Pick a recurring investment date and frequency (monthly is fine).
Automate your buys.
On meaningful dips (15%+), consider a booster order for extra compounding.
Stick to your plan—don’t suspend it due to negative news or “crash fears.”

10. Conclusion: Discipline Beats Hype

Bitcoin rewards the patient, the disciplined, and those with a plan. FOMO buying at all-time highs has rarely been the fast lane to riches; usually, it’s the painful catalyst for regret and emotional churn. Markets are cyclical, and even in magnificent bull runs, corrections to the 200DMA or below are more common than most realize.

Key Takeaways:

Buying close to the 200DMA minimizes drawdown risk and boosts long-term returns.
The 70/30 approach (bulk at 200DMA, keep cash for deeper dips) offers a balanced, strategic edge.
SIP/DCA is the ultimate fallback for those who don’t want to time the market—and it wins most long-term backtests against lump-sum all-in at highs.
Market hype won’t protect you. Only discipline and history-tested methods will.

Get your watchlists ready, stay patient, and remember: The best opportunities come during the scariest market corrections, not the euphoric peaks.

References

(All data as of July 19, 2025. Validate numbers with latest exchange APIs or tradingview sources before acting.)

Why You Should Not Buy Bitcoin at Current Levels: Wait for the 200DMA or SIP the Dips

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