Buying Bitcoin Dips vs DCA
What happened over 1, 3 and 5 years?
We invested nearly the same amount of capital using two different rules: weekly DCA and an ATH drawdown strategy.
The question
Dollar-cost averaging is one of the simplest ways to accumulate Bitcoin. Pick an interval, invest the same amount every time, and ignore the price.
It removes a difficult decision: deciding when to buy.
But it also creates an interesting trade-off. A DCA strategy keeps spending capital regardless of whether Bitcoin is close to an all-time high or deep inside a bear market.
Cryptera takes a different approach.
Instead of buying simply because another week has passed, it waits until Bitcoin has fallen a predefined percentage from its all-time high. As the drawdown becomes deeper, the strategy can deploy more capital.
So we wanted to answer a simple question: what happens if both approaches invest approximately the same amount of money?
The two strategies
Weekly DCA
The benchmark strategy is deliberately simple.
- Buy Bitcoin every 7 days
- Use the same amount on every purchase
- Ignore the current Bitcoin price
ATH Drawdown
Cryptera buys only after Bitcoin has fallen sufficiently far from its all-time high.
| Drawdown from ATH | Buy amount |
|---|---|
| 30%+ | 10 USDT |
| 40%+ | 20 USDT |
| 50%+ | 30 USDT |
The strategy can buy no more frequently than once every 7 calendar days.
These levels are designed around Bitcoin drawdowns from its previous all-time high. Historically, however, deep drawdowns have occurred much less often than shallower ones. See how deep Bitcoin drawdowns have historically gone .
The drawdown threshold itself also matters. We tested Bitcoin purchases triggered at 10%, 20%, 30%, 40% and 50% below the previous all-time high to see how different entry levels affected historical returns. See the full Bitcoin dip buying strategy comparison .
How we made the comparison
Comparing two accumulation strategies can easily become misleading if one of them simply invests more money.
To make the comparison fair, we first measured how much capital Cryptera deployed during each backtest period. We then adjusted the fixed weekly DCA purchase amount so that, over the same period, DCA invested approximately the same total amount.
| Period | Cryptera invested | DCA invested | DCA weekly purchase |
|---|---|---|---|
| 5 years | 3,430.00 USDT | 3,429.54 USDT | 13.14 USDT |
| 3 years | 1,130.00 USDT | 1,130.40 USDT | 7.24 USDT |
| 1 year | 570.00 USDT | 569.75 USDT | 10.75 USDT |
The DCA purchase amount is therefore different for each period. It is not a strategy parameter being optimized for performance; it is only used to keep the total invested capital comparable between the two strategies.
Both backtests use the same BTCUSDT historical daily candle dataset and execute simulated purchases using the daily candle price used by the backtesting engine.
No trading fees, taxes or slippage are included. The purpose of the experiment is not to reproduce the exact result a particular investor would have received, but to isolate the effect of the capital deployment rule.
Results at a glance
The three periods produced very different market conditions. That makes the comparison more useful than looking at a single favorable backtest.
| Period | Strategy | Invested | Final value | PnL | ROI | Max DD |
|---|---|---|---|---|---|---|
| 5 years | Cryptera | $3,430.00 | $7,601.74 | +$4,171.74 | +121.62% | −50.30% |
| DCA | $3,429.54 | $5,109.89 | +$1,680.35 | +49.00% | −48.94% | |
| 3 years | Cryptera | $1,130.00 | $1,638.83 | +$508.83 | +45.03% | −47.22% |
| DCA | $1,130.40 | $1,105.33 | −$25.07 | −2.22% | −44.35% | |
| 1 year | Cryptera | $570.00 | $518.76 | −$51.24 | −8.99% | −20.12% |
| DCA | $569.75 | $448.08 | −$121.67 | −21.35% | −26.93% |
ROI Comparison
Accumulated BTC Value Over Time
A full bear and bull cycle
The five-year period begins in August 2021, shortly before Bitcoin entered one of the largest drawdowns of the cycle.
Weekly DCA invested $3,429.54 across 261 purchases and finished at $5,109.89.
Cryptera deployed almost exactly the same capital, but concentrated more of it during deeper drawdowns.
Starting after the 2022 crash
A five-year test gives the drawdown strategy access to the 2022 bear market, so we also tested a shorter three-year period.
This changes the experiment considerably. The strategy no longer gets to accumulate through the entire collapse from the 2021 highs.
Both strategies invested almost exactly the same amount, making the difference in their ending values easier to compare.
What happens when both strategies lose?
The one-year period is perhaps the most interesting test because neither strategy made money.
Weekly DCA invested $569.75 across 53 purchases and finished at $448.08.
Cryptera invested almost exactly the same capital, but its lower average entry prices reduced both the final loss and the maximum drawdown.
Why the results differ
Neither strategy predicts the bottom. They simply use a different signal to decide when to buy.
Time decides
Bitcoin is purchased every seven days, regardless of its price or distance from the ATH.
Drawdown decides
Bitcoin is purchased only after the market reaches a predefined drawdown from its ATH.
What this backtest does not prove
Backtests describe historical behavior. They do not tell us what Bitcoin will do next.
Same capital.
Different timing.
The biggest difference was not how much money entered Bitcoin. It was when that capital was deployed.
Across all three periods, invested capital was kept nearly equal. Weekly DCA allocated it according to time, while Cryptera concentrated purchases during deeper drawdowns.
DCA or drawdown-based accumulation?
DCA remains difficult to beat in simplicity.
It requires no market analysis, no thresholds and almost no decision-making. For an investor who wants to continuously convert part of their income into Bitcoin, that simplicity can be a major advantage.
Drawdown-based accumulation solves a different problem.
Instead of asking: "Is it time for my next purchase?" it asks: "How far has the market fallen, and how much capital should I deploy here?"
In the historical periods tested here, that distinction had a substantial impact on the outcome.
Whether it will continue to do so in the future is something no backtest can answer.
Dip-buying strategies also depend on how frequently capital is deployed during a downturn. In a separate backtest, we compared fixed vs progressive Bitcoin dip-buying frequency across 1-year, 3-year, and 5-year periods.
About Cryptera
Cryptera is an automated cryptocurrency accumulation service built around predefined buying rules rather than discretionary market timing.
The ATH Drawdown strategy used in this experiment monitors an asset's decline from its all-time high and can automatically increase purchase sizes as the drawdown becomes deeper.
The goal is not to predict the bottom. It is to make capital deployment systematic.
Learn more about CrypteraThis article is a historical backtest for research and educational purposes only. Past performance does not guarantee future results. It does not include trading fees, slippage, taxes or other execution costs and should not be considered financial advice.