Is Cheaper Bitcoin Actually A Better Buy?

Bitcoin has pulled back from the high $80,000s to the mid-$70,000s. It does feel like a discount, but I wanted to test whether cheaper really was better. Does buying below newer investors’ cost basis improve the odds, or are we simply buying into a deeper downtrend?

 

Before buying the dip:

• Short-Term Holder MVRV has slipped below 1 as newer holders fall underwater in aggregate.
• Since 2018, deeper discounts haven’t consistently improved the chance of higher prices.
• Regular buying with extra purchases below 1 outperformed dip-only buying in the comparison.

 

Back Underwater

Short-Term Holder MVRV compares Bitcoin’s price with Short-Term Holder Realized Price, the aggregate cost basis of newer holders. It has now slipped below 1. These investors are underwater as a group, but previous breaks below this level have also marked the beginning of much steeper declines.

 

Figure 1: Short-Term Holder MVRV slips below 1 as price falls beneath the cohort’s cost basis.

 

View Live Chart

 

Cheaper Isn’t Always Better

Looking at the data since 2018, lower Short-Term Holder MVRV readings didn’t consistently give a higher chance of recovery. At 180 days, the 0.80–0.90 band saw Bitcoin higher only 46% of the time. The 1.10–1.20 band recorded 71%.

 

Figure 2: Since 2018, deeper Short-Term Holder MVRV discounts show mixed forward outcomes.

 

That’s why I want to consider the trend alongside valuation. Bitcoin is currently above the 200-Day Moving Average, whereas the failed recovery in May met resistance there. Buying near the cost basis during an uptrend is a different proposition from buying below it during a continuing bear market.

 

What’s The Payoff?

At the time of writing, Short-Term Holder MVRV has dipped beneath 1, placing it in the 0.90–1.00 band. Over 180 days, and since 2018, that band has delivered a 23.5% median return across all outcomes. Its 57.8% frequency of higher prices was only slightly above the 57.2% all-days baseline.

 

Figure 3: The 0.90–1.00 band records a 23.5% median return over 180 days.

 

However, for this band the potential downside was substantial, with the 10th-percentile return being −47.3%, and the median worst loss along the way being −21.8%. I see opportunity here, but this is high risk, high reward.

 

Keep Buying

The final comparison gives each buy strategy the same capital and includes unspent cash. Regular buying with a dip rule came out ahead. Invest half the cash monthly while Short-Term Holder MVRV is at least 1, then deploy all available cash when it falls below 1.

 

Figure 4: Regular buying with a dip rule leads the equal-funded comparison since November 2022.

 

Waiting exclusively for dips finished close to simply buying $1,000 every month. Keeping some regular exposure while saving money for discounts worked better in this period than trying to get the perfect entry.

 

Buying With Context

I think the combination of this valuation and nearby support makes Bitcoin attractive here. The lesson for me is to keep accumulating while leaving room to buy more at a discount. A lower price alone isn’t enough, and getting the exact bottom isn’t necessary.

 

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For more on this, watch our recent YouTube video here:

Before You Buy Another Bitcoin Dip, Watch This

 

Have a lovely week, and I'll see you in the next one!

 

@MattCrosbyPro

Research Director