Master the Fundamentals and Prepare for Your Journey
Introduction to Bitcoin for Investors
What is Bitcoin?
Bitcoin is a decentralized digital currency — a cryptocurrency that operates independently of banks or governments. It enables people to conduct transactions directly with each other, quickly and without intermediaries, using only an internet connection.
Why Does Bitcoin’s Price Fluctuate So Much?
Bitcoin’s price volatility is primarily driven by the fundamental economic principle of supply and demand:
- When many people want to buy and few want to sell → price rises
- When more people want to sell than buy → price falls
Key factors influencing Bitcoin’s price include:
- Market news and sentiment
- Limited supply (only 21 million Bitcoin will ever exist)
- Economic factors and macroeconomic conditions
- Seasonal patterns and market cycles
⚠️ Critical Warning: Only invest what you can afford to lose. Never put 100% of your wealth into something you don’t fully understand.
The Entry Point: Strategies for Entering the Market
Your First Bitcoin Purchase
Recommended Approach: While many use centralized exchanges, consider peer-to-peer (P2P) trading for more privacy and control over your transactions. Research reputable P2P platforms and understand the process thoroughly before making your first purchase.
Now that you understand Bitcoin fundamentals and price movements, here are three proven strategies for cryptocurrency investors:
Strategy 1: DCA (Dollar Cost Averaging)
The Time-Tested Approach
This strategy mirrors the wisdom found in classic financial texts like “The Richest Man in Babylon”.
How it works:
- Allocate 10% of your monthly income to Bitcoin purchases
- Buy regardless of price — ignore market volatility
- Accumulate consistently over time
- Hold long-term and let compound growth work
The Simple Process:
Paycheck Arrives → Save 10% → Buy Bitcoin → Store Securely → Return to Work
Key Benefits:
- Zero stress about timing the market
- No need to follow daily news or price charts
- Compound growth over 3-5 years can be substantial
- Disciplined approach that removes emotion from investing
💡 Pro Tip: Use a compound interest calculator to project potential 5-year returns with consistent DCA investing.
Strategy 2: Mayer Multiple Analysis
Technical Analysis for Smart Entry Points
The Mayer Multiple is a simple indicator that shows whether Bitcoin is expensive or cheap relative to its historical average.
Calculation: Current Bitcoin Price ÷ 200-Day Moving Average
How to Interpret:
| Mayer Multiple | Market Condition | Action |
|---|---|---|
| Above 2.4 | 🔴 Overvalued | Consider selling or waiting |
| 0.8 – 2.4 | 🟡 Neutral Zone | Normal market conditions |
| Below 0.8 | 🟢 Undervalued | Historical buying opportunity |
Additional Technical Indicator:
- Above 200-day moving average = Bullish trend (consider buying)
- Below 200-day moving average = Bearish trend (consider selling)
Combined Strategy Example:
- 200-day MA: Bullish ✅
- General Trend: Buy signal ✅
- Mayer Multiple: 1.09 (Neutral) ⚠️
- Prudent Action: Wait for better entry
Decision Matrix:
- All 3 indicators = BUY → Purchase Bitcoin
- All 3 indicators = SELL → Consider partial profit-taking
- Mixed signals → Exercise patience
Useful Resources:
Strategy 3: Google Trends Sentiment Analysis
Harness Global Market Psychology
This lesser-known technique uses global search sentiment to time entries and exits.
How to Set It Up:
- Visit: trends.google.com
- Click: “Explore”
- Search Terms:
- Term 1: “Bitcoin”
- Term 2: “Buy Bitcoin”
- Set Location: Global (Worldwide)
- Time Frame: Past 12 months
Trading Rules:
| Google Trends Score | Market Sentiment | Action |
|---|---|---|
| Below 50 | 😨 Fear/Apathy | BUY – Public interest is low |
| 50-79 | 😐 Neutral | Hold or small positions |
| 80-100 | 🤩 FOMO/Euphoria | SELL – Peak public interest |
📊 Psychology Principle: Be greedy when others are fearful, and fearful when others are greedy.
Exit Strategies: When and How to Take Profits
Knowing when to sell is just as crucial as knowing when to buy. Remember: Our goal is to accumulate Bitcoin long-term, but we can maximize returns through strategic short-term exits.
“When to Sell?” – Creating Your Exit Strategy
1. Set Clear Profit Targets
- Define your victory percentage in advance (e.g., 50%, 100%, 200%)
- Write down your plan before emotions take over
- Stick to your predetermined exits
Example Targets:
- Conservative: 25-50% gains
- Moderate: 50-100% gains
- Aggressive: 100%+ gains
2. Sell During Peak Optimism
- Use Google Trends to identify euphoric moments
- When mainstream media is bullish → Consider taking profits
- “Buy when others are fearful, sell when others are greedy”
3. Partial Position Selling
- Never sell everything at once
- Take profits in increments: 10-20% at a time
- Preserve majority position for long-term growth
Real Example:
“I invested in Bitcoin starting at $45,000 in 2024. When we entered 2025 with over 100% returns, I began taking small profits — 5-10% at a time. I preserved 70% of my position with that excellent average cost basis.”
4. Understanding Bitcoin Seasonality
Bitcoin Halving Cycle Strategy:
- MASSIVE BUYING = Before the Halving event
- GRADUAL SELLING = After the Halving event
The halving affects Bitcoin and influences the entire cryptocurrency market (Ethereum, Solana, etc.).
Final Thoughts: The Art of Selling and Managing Risk
Key Principles to Remember:
- You won’t be right every time — maybe not even 50% of the time
- Bitcoin’s unique value proposition makes it worth the learning curve
- Study the fundamentals and practice these three strategies
- Start small with money you can afford to lose
Your Action Plan:
✅ Start Conservative: Begin with risk capital only ✅ Document Everything: Keep detailed records in a spreadsheet or document ✅ Set Multi-Timeframe Goals:
- Short-term: 3-6 months
- Medium-term: 1-2 years
- Long-term: 5+ years
Additional Resources
Remember: This guide is for educational purposes only. Always do your own research and consider consulting with a financial advisor before making investment decisions.