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When Is The Right Time to Buy Crypto?
Ruby Layram
28th Feb 2025
One of the most commonly asked questions that people have when they get started with cryptocurrency is, “When is the right time to buy crypto?”. In this guide, we will explore how to know when to buy crypto, key indicators to look for and whether or not timing the market is the best solution for crypto investors.
Reasons Why Someone Might Buy Cryptocurrency
To understand whether cryptocurrency is a good investment for you, it is helpful to know some of the common reasons that people choose to buy crypto in the first place.
To hedge against rising inflation
Inflation erodes the purchasing power of money over time. Some investors consider some cryptocurrencies, like Bitcoin, to be a possible hedge due to their limited supply and decentralised nature.
Keep in mind though that cryptocurrencies are highly volatile and there is no guarantee that the coins will hold their value. Another inflation hedge to consider might be gold.
To invest in emerging tech trends
The blockchain technology underpinning cryptocurrencies is revolutionising various industries, from finance to supply chain management.
Investing in cryptocurrencies allows investors to gain exposure to these tech advancements and have a stake in their future.
To explore alternative assets
Diversification is a key principle in investment. Cryptocurrencies offer an alternative asset class that operates independently of traditional markets, providing a potential buffer against market volatility.
To use cryptocurrency as a digital payment method
Beyond investment, cryptocurrencies offer a decentralised method of transferring value (a fancy way of saying that you can move value outside of the banking system!).
Some people purchase digital currencies to use them for making payments without the need for a central intermediary.
When Is The Right Time to Buy Cryptocurrency?
Timing the market can be challenging, especially in the volatile world of cryptocurrencies. However, certain strategies and indicators can guide investors:
The ‘best’ time of day to buy crypto
Cryptocurrency markets operate 24/7, but trading volumes and price volatility can vary throughout the day.
Some experts suggest that certain times may offer better opportunities for buying crypto (although this should be taken with a pinch of salt!). For example, weekends could be better if you’re trading DeFi tokens and want to minimise gas fees.
So, identifying ‘low fee’ time periods could be beneficial to your overall strategy.
Buying during a dip
Market corrections, where asset prices decline from recent highs, can present buying opportunities. Purchasing during these dips allows investors to buy crypto at a lower cost, potentially reducing their average buy price.
However, it can be difficult to differentiate between a market correction and a more significant downward trend. Buying at the start of a long-term downtrend could cause you to lose money if you sell at a loss.
Trading the news
News events can significantly impact cryptocurrency prices. News, such as regulatory changes, technological advancements, and political events can all have an effect on market prices. Additionally this can affect different assets and asset types in different ways.
Some savvy investors monitor news outlets and market sentiment to help them make informed investing decisions.
Buying when sentiment is high
Market sentiment, the overall attitude of investors toward a particular cryptocurrency (or crypto as a whole), can influence price movements.
Tools that analyse social media trends, trading volumes, and other metrics can help investors understand how the wider market is feeling. While buying during positive sentiment can be advantageous, it’s crucial to avoid herd mentality and conduct thorough research.
Crypto market cycles
Cryptocurrency markets often operate in cycles, characterised by periods of rapid growth (bull markets) followed by corrections (bear markets).
Recognising these cycles can help investors to make strategic investment decisions. For example, entering the market during the early stages of a bull run can be beneficial if the exit is also timed well, however, the volatility of cryptoassets can make this very challenging.
Interest rate cuts and economic indicators
Macroeconomic factors, such as interest rate changes and economic indicators, can influence cryptocurrency markets.
For instance, lower interest rates can lead to reduced returns on traditional savings, prompting investors to seek alternative assets like cryptocurrencies.
On-Chain metrics
On-chain metrics involve analysing data recorded on the blockchain, such as transaction volumes, active addresses, and holding periods. These metrics can provide insights into network activity and investor behaviour, which can be useful for identifying potential entry points.
This is a pretty advanced research strategy. But, it’s useful to understand that these metrics play a role!
The Risks of Timing The Market
While timing the market might sound like a smart way to buy crypto, the reality is very different!
Attempting to time the market—predicting the optimal moments to buy or sell—comes with quite a bit of risk.
Here are a few of the risks that come with timing the market:
- Volatility: Cryptocurrency prices can experience rapid and unpredictable changes, making precise timing challenging.
- Emotional decision-making: The pressure to buy at the lowest point or sell at the peak can lead to stress and impulsive decisions, potentially resulting in losses.
- Opportunity cost: Waiting for the “perfect” time to invest might lead to missed opportunities, especially if the market moves contrary to expectations.
Dollar Cost Averaging
Dollar Cost Averaging (or DCA), allows you to spread your investment over regular intervals, taking advantage of price fluctuations and market movements.
What is Dollar Cost Averaging?
Dollar Cost Averaging involves investing an amount of money into an asset at regular intervals, regardless of its price.
This approach spreads out investments over time, reducing the impact of short-term volatility
The goal of Dollar Cost Averaging is to reduce the “average” buy price into a particular asset, compared to making the same size investment all at once.
How to Invest in Crypto with DCA
Although Dollar Cost Averaging might sound fancy, it’s actually very simple to implement. Here’s how you can do it in 3 easy steps.
Step 1: Choose a crypto exchange with a low minimum investment
Select a reputable cryptocurrency exchange that allows for small, regular investments. For example, Coinjar allows you to invest with £1 at a time as long as you already have funds in your account.
Ensure the platform has robust security measures, and reasonable fees, and supports the cryptocurrencies you’re interested in.
Step 2: Choose coins to invest in
Diversification can reduce risk (but it doesn’t remove it!). Research and select a handful of cryptocurrencies that you wish to invest in.
Step 3: Set up automatic investments
Many exchanges offer features that allow automatic, recurring purchases. Setting up an automatic investment plan ensures consistency and removes the emotional aspect of decision-making.
Choose a fixed amount you’re comfortable with—whether it’s £50, £100, or £500 at a time—and that’s it! .
This way, you steadily build your crypto portfolio without the stress of trying to time the market perfectly. You will still need to monitor your investments and remember that while DCA’ing can reduce the effects of high volatility, it does not protect your investment, and you are still subject to the risk of assets not increasing in value, or failing completely.
Final thoughts
The cryptocurrency market is known for being volatile, which can make it incredibly difficult to time the market.
Although some experts have found ‘optimal’ times to buy crypto, the real answer is that there is no ‘right’ time to invest. Instead, it’s about setting your own goals and developing a strategy that works for you.
| Standard Risk Statement |
| The above article is not to be read as investment, legal or tax advice and it takes no account of particular personal or market circumstances; all readers should seek independent investment advice before investing in cryptocurrencies. The article is provided for general information and educational purposes only, no responsibility or liability is accepted for any errors of fact or omission expressed therein. Past performance is not a reliable indicator of future results. |
| UK residents are required (in accordance with local legislation) to complete an appropriateness assessment to show they understand the risks associated with what crypto/investment they are about to buy and enabling CoinJar to categorize them as an investor. New customers are also required under local regulations to wait 24-hours as a “cooling off” period (from account creation), before their account is active (i.e. to deposit, trade, withdraw etc.). |
| Cryptocurrency is currently not regulated in the UK. It’s vital to understand that once your money is in the crypto ecosystem, there are no rules to protect it, unlike with regular investments. You should not expect to be protected if something goes wrong. So, if you make any crypto-related investments, you’re unlikely to have recourse to the Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service (FOS) if something goes wrong. |
| Remember: |
| Don’t invest unless you’re prepared to lose all the money you invest. This is a high‑risk investment and you should not expect to be protected if something goes wrong. Take 2 minutes to learn more: www.coinjar.com/uk/risk-summary. |
| If you use a credit card to buy cryptocurrency, you would be putting borrowed money at a risk of loss. We recommend you obtain financial advice before making a decision to use your credit card to purchase cryptoassets or to invest in cryptoassets. |
| Note the standard risk warning from the CoinJar website. |
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