The Question
Start in January 2017 with $10 a day. Buy more when a single chart line says bitcoin is cheap, sell when it says rich, and by April 2026 the wallet holds $169,000: built from just $5,200 of new money. The chart line is Power Law Position. The rest came from selling into strength and reinvesting the proceeds.
Plain daily buying with no selling, over the same window, costs $32,000 and ends at $256,000. A 13-indicator composite costs far more and ends higher still, at $386,000. Each route arrives at a different place. The question is what each is optimizing for.
Three strategies were tested against every meaningful entry point since 2017. The findings split cleanly: one wins on total dollars, one wins on capital efficiency, one wins on simplicity. None of them predicts price.
Three Strategies
All three start from the same base daily amount (e.g., $10/day):
Standard DCA. Invest the base amount every day, never sell. The baseline everything else is measured against.
Power Law DCA. One indicator: where bitcoin sits in its long-term logarithmic growth corridor. Buy 5x when deeply undervalued (grade A/B), 3x when leaning cheap (C+), 1x at fair value (C), sell gradually when overheated (D), sell aggressively at extremes (F). Cash from sales funds future buys.
Signal DCA. All 13 indicators weighted by SHAP importance. The composite score drives buy multipliers (5x/3x/1x/0.5x). When the composite drops below 3.8, selling begins. Cash from sales is redeployed during the next accumulation window.
What the Backtest Shows
Twelve start dates run from January 2017 to January 2025: the December 2017 top, the March 2020 crash, the November 2021 peak, the November 2022 FTX bottom. All backtests end in April 2026.
Each strategy wins at something different:
Signal DCA produces the largest total portfolio. It wins 8 out of 8 scenarios on absolute value. From 2017: $386k against Standard's $256k and Power Law's $169k. The reason: it buys at 5x for roughly half of all days, deploying more capital.
Power Law DCA is the most capital-efficient. It produces the best return per dollar out of pocket in 6 out of 8 scenarios. From 2017: a $169k portfolio from only $5.2k of new money: a 31.6x return. The mechanism is the sell side. The D grade fires for about 11% of days, draining bitcoin into cash during the long climb to each peak. That cash funds the next accumulation phase. The market does most of the buying.
Standard DCA is the simplest. No decisions, no selling, no cash management. It underperforms both signal strategies. It never costs more than the base amount. That is the trade.
Why Power Law Is So Capital-Efficient
The verdict distributions diverge sharply:
- Power Law: 2% Strong Buy, 48% Accumulate, 43% Hold, 11% Reduce/Sell
- Signal DCA: 46% Strong Buy, 41% Accumulate, 3% Hold, 1% Reduce, 6% Sell
Power Law says Hold, invest the base amount, on 43% of days. Signal DCA says Strong Buy, invest 5x, on 46% of days. Signal costs more out of pocket because it leans on the gas for most of the cycle.
Power Law also sells earlier, and more often. Its D grade fires across the entire build-up to cycle peaks: $3.4k to $12k in 2017, $31k to $68k in 2021. Each tick converts bitcoin to cash. That cash then funds the next Strong Buy window. Sell, hold dollars, redeploy. Repeat with the cycle.
The Timing Question
A fixed-budget test isolates timing alone. Both strategies invest the same total dollars. Only the when changes.
The result: +0.0% on average. Neither signal beats Standard DCA on timing alone. Where the outperformance comes from is capital allocation and the sell-and-redeploy cycle: investing more during cheap windows, and using market profits to fund future buys. The signals do not see the future. They just size the bet.
What SHAP Shows
XGBoost and LSTM, walk-forward across four market cycles, ranked Power Law Position first in 11 of 12 rounds. The runner-up never closed the gap. SHAP says what the backtest says: one indicator carries the timing signal. The other twelve fill in the scenery.
Trend direction, on-chain activity, macro conditions: the rest of the panel adds context but does not improve the DCA outcome. Each still earns a chart on the dashboard because each tells its own story. Averaging them into a composite tends to mute the extremes rather than sharpen them. The signal is loudest when one indicator screams alone.
What This Is Not
- No strategy times the market. Fixed-budget testing shows no timing alpha.
- Power Law sells early. Selling begins during the build-up to peaks, not at the top. Bitcoin sold at $30k will, later, trade at $60k.
- Signal DCA's large portfolio comes at a cost. It demands up to 5x the base amount on most days. The outperformance is not free.
- Bitcoin has been a structurally rising asset. All three strategies ride that current. Power Law models the curve directly.
- Only 3 cycle peaks exist in the record. The sell logic has been stress-tested against a small sample.
- No transaction costs or taxes are modeled.
- This is not financial advice.
The Bottom Line
For the simplest approach: Standard DCA. No decisions needed.
For the best return per dollar out of pocket: Power Law DCA. One indicator, clear rules, sells during overvaluation, redeploys market profits.
For the largest possible portfolio, with budget for 5x days: Signal DCA. 13 indicators, ML-weighted, aggressive accumulation.
None of them predict price. All three answer a different question: how much to invest, given current conditions. What separates them is how loudly they act on the answer, and whether they take chips off the table on the way up.
Try It Yourself
The interactive backtest lets you compare all three strategies with any start date and base amount.