DCA bots help investors spread their buys over time to reduce the impact of price volatility and the dreaded Fear-Of-Missing-Out (FOMO), as investors often incur during said price volatility.
Investors risk ending up in a losing position due to a price drop when purchasing ‘highs’ with a lump-sum investment, otherwise known as an (All-in). The investor then must make the decision whether to hold (hodl) or cut that position at a loss due to the risk associated with an all-in. It’s easy to see green candles and jump all-in on a position, or see red candles and quickly decide to dump out.
However, cryptocurrency market volatility means that coins trend from support to resistance and then back down to support again before making moves higher. Timing bottoms or tops is something even the most seasoned professionals struggle with, which is why you’ll hear the top traders say they’ve been “accumulating,’ or ‘taking profit’ on tokens over time, mitigating those risks.