You hear advice like buy the dip, but does it really work? Here I run a simulation for 2016 to present to find out.

There is no doubt that the overall market is down right now. For example take a look at BTC and ETH and their value relative to their ATH. Yikes.

historically these type of level of drop has occurred 15 times for BTC and about 20 for ETH.

And now the question is for people who DCA ( buy once a week ) is it worth to purchase more during the this time? The likely answer is probably yes but here I wanted to not just based on intuition but simulate what would happen.

Method:

I basically have the investment set at 100 USD to purchase every week on Wednesday. If the coin drops below -40% from its 90 day ATH then it increases that by 50%(150.00) or the investment increases by 25% (125) when it drop to -20%.

I used the coinbase API so the furthest data I an get is 2016 so I can only start there.

Results:

BTC

ETH

Caveat is that its not completely accurate because on those week that are off below the threshold more money is invested while the base control is not, however I ignore this because I'm trying to stimulate a real situation in which you would simply put in more money.

TLDR: the bottom line is increasing the amount of DCA during drops are useful. In this example with a 100 dollar investment per week the difference for BTC is 30K while for ETH its about 235K.

TLDR2: regardless however, even if you just stuck to the 100 USD per week for BTC the net is still 428K and 1 million for ETH.

Happy DCA'ing and investing.

And remember past result does not guaranteed future returns but it does leave a bit of clue that we can go on.