Introduction

Everyone knows that DCA and HOLD is the king of crypto investing. Everyone loves it for lack of unnecessary emotional involvement with your investment and simplicity.

But what if there is better way to become a whale of cryptocurrency world? What if there is secret sauce that lays in the open just before our eyes?

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Goal of this analysis is to prove or disprove superiority of weighted DCA strategy over standard DCA.

Essentials

What is weighted DCA?

Weighted DCA (thats how i named it, maybe there will be better alternative in the comments) is strategy that is variant of standard DCA with one simple change. In addition to buying at the market price every week you also set limit orders at some % below market price.

So, how it works exactly? Example -20%

1. You split your weekly DCA into 5 parts
2. One part you buy at the market price and other four part are going into limit orders 5,10,15,20% below market price.
3. After a week either your orders get fulfilled or not. Unfulfilled orders are canceled and added to next week DCA fund.
4. Spilt into 5 parts again.

Example on numbers:

Bitcoin at 31 December 2021 was traded at 100'000$ (totally random date and price ) and week later price dropped to 90k$. You DCA 100$ every week.

1. Your orders 20$ at 100k, 20$ at 95k, 20$ at 90k, 20$ at 85k and 20$ at 80k.
2. After a week you have to unfulfilled orders at 85k and 80k for sum total 40$, you cancel them and add to this week DCA.
3. So now you have 140$ (100$ weekly plus 40$ from unfullfilled orders) - you split them again to 5 parts (28$) and place orders at market price and -5,10,15,20%.

Isn't it timing the market? Maybe, but put down your pitchforks and wait for results before you lynch me.

Excel time!!!

Data

Data i used for analysis come from https://www.investing.com/crypto/bitcoin/historical-data.

I calculated 3 different time periods (5 years, 2 years and 1 year) and 3 strategy variants (-20%, -15% and -10%). Data used starts from 4 March 2018 and ends at February 26 2023. Weekly DCA amount is 100$ in all variants presented.

That's how my excel is looking. I know ugly af, but it works.

Ugly af excel sheet ;(

Results

So it's time. The tension and grant finale. Let's present the results.

5 years Bitcoin accumulation graph

Most successful variant of strategy tested was -20%/5 parts DCA with results of:

• 4,23% gain compared to standard DCA at 5 year period
• 5,25% gain compared to standard DCA at 2 year period
• 4,86% gain compared to standard DCA at 1 year period

Second best was -15%/4 parts DCA with results of:

• 3,91% gain compared to standard DCA at 5 year period
• 4,70% gain compared to standard DCA at 2 year period
• 4,54% gain compared to standard DCA at 1 year period

Last was -10%/3 parts DCA with results Of:

• 2,92% gain comapred to standard DCA at 5 year period
• 3,53% gain comapred to standard DCA at 2 year period
• 2,87% gain compared to standard DCA at 1 year period

Conclusion

The results are pointing that this approach would make significant gains in the past, but we need to remember that past results don't guarantee same results in the future.

My toughs:

There's no much difference between -15% and -20% approach and there was only 8 times when price dropped more than -20% in a week in 5 years, 1 time in last 2 years and 0 in last year . In my opinion there -15% approach could be most profitable in the future, as crypto markets are becoming more and more mature and less volatile.

It would be nice to know your thoughts about this and if u want me to make more post like that.

TLDR: Looks like it is worth time spend, but without crystal ball who knows?