The crypto market has lost over 19% of its overall value in the dip that occurred last week, making it a difficult time for crypto traders and investors. The very recent dip has to be a new experience for lots of traders because the all-time high value of bitcoin attracted several new investors. Cryptocurrency dip refers to a big fall in the market value of any cryptocurrency.
Recent Data shows that on Saturday, the 24th of September, Bitcoin fell from almost $64,000 to $48,000 for the first time since the 8th of March. The undefined lows in the charts didn’t stop, thereby bringing the total loss in the bitcoin market to over $400 billion that same week.
The panic amongst many, especially new traders, has been intense. Many who are still in the early stages of their trading journey are already regretting their decision to trade.
Other cryptocurrencies made sure to join the dip party. Ethereum went from its all-time high of $2,600 to $2,000. Speculations on the cause of this drop point to US President Joe Biden’s remarks on capital gains tax reform, which will impact the country’s ultra-wealthy and result in investors spending more for their Bitcoin earnings.
However, it is imperative to note that dips are very common happening in the crypto world. The dip is to cryptocurrency as rain is to earth. This is not the first time we are experiencing such dips, and it sure as Hell is not bitcoin’s first rodeo as just this February, it fell from $57,000 to $45,000 in a week.
However, it quickly recovered and was done in two weeks, reaching an all-time high of more than $60,000. In essence, there are minor and large dips, with the most recent being a large dip. While we wait for the currency to recover, there is some positive news: this is a good time to “buy the dips”.
“Buy the dip” refers to strategically purchasing bitcoin at a low price and then selling immediately for a profit or stashing as many as possible when the price is low as a kind of long-term investing. In a nutshell, it is profiting from the decline in the value of cryptocurrencies. The main point to remember when purchasing dips is to understand the purpose you’re buying cryptocurrencies in the first place.
Here are 3 tips to help you through the dips
In the spirit of making the most of every situation, here are some pointers for any cryptocurrency downturn:
Buy During the Dip: The best way to assure yourself of profit is when you purchase a product at a lower price to sell higher. It is the same with cryptocurrency. When the value of a cryptocurrency is low, many people hurry to purchase it because they believe it would be a safe investment. Buying when the price is low, on the other hand, makes sense. It is thought that taking advantage of crypto dips is a better strategy than waiting until prices are high (when many more people would be scrambling to buy), putting you under pressure to sell or exchange at a lower price.
Buy when the price is lesser than the previous high: You can tell when the price is at its lowest by studying market trends for that cryptocurrency as well as its history. That way, you can get a rough estimation of how low cryptocurrency can go during that season. This is the best advice for people who want to invest in bitcoin for the long term.
Look out for the big and small Dips and Buy in instalments at every new dip: The strange thing about dips is that they can go lower, making it difficult to know where the bottoms of those dips are.
In crypto, there are usually many small dips, followed by larger ones for a few weeks or months. Depending on your investment strategy, buying during both small and big dips is a good idea. If you’re investing peer to peer, it’s a smart idea to buy during the small dips, but if you’re trying to invest long term, look for the big ones. The aim of this approach, on the other hand, is to make more money by purchasing at lower costs rather than high ones.
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