Thoughts on DCA in current crypto climate vs. a more selective approach
Been thinking a lot about the standard 'just DCA into $BTC and $ETH' advice, especially given the market's recent movements. While it's sound for long-term accumulation, I'm starting to wonder if it leaves too much on the table, or even exposes you to unnecessary drawdown, when there's such clear cyclicality and identifiable periods of euphoria/capitulation.
I mean, if you were blindly DCAing into something like ASML at its highs, you'd be looking at a significant paper loss right now, even if it's a solid company long-term (currently sitting around $1751, well off its peaks). Crypto amplifies that volatility. Isn't a more selective, perhaps even active, accumulation strategy, where you're really looking for those deeper pullbacks and capitulation events to deploy larger chunks, potentially superior? I'm not talking about trying to time the absolute bottom, but rather scaling in more aggressively when sentiment is truly in the gutter, rather than just buying the same amount every week regardless of price action.
Am I overthinking this, or is the DCA mantra a bit too simplistic for navigating these kinds of market conditions? Would love to hear some pushback.
DCA is meant to smooth out those cyclical movements, not perfectly time them. If you're confident you can identify the "euphoria/capitulation" phases better than the market, then sure, a more selective approach might appeal to you. Otherwise, it's just active management with higher risk.