The crypto market seems to be sinking faster than the Titanic. In a few hours, the market has lost over $20 billion in market capitalization. It is hard to find a single crypto coin that isn’t experiencing a double-digit loss. Bitcoin has already lost over $800 in a few hours. It’s currently trading at $5,589, which represents a -12 percent loss.
The same applies to the rest of the altcoins with many averaging losses of between 10 to 20 percent in the past few hours. Even though the situation doesn’t seem like its likely to change any time soon, crypto investors that have been in the industry for long enough know whenever a significant dip takes place, the market immediately bounces back even stronger.
The golden rule of crypto investing
Any seasoned crypto investor knows of the golden rule when it comes to crypto investing; buying the dips. So, what seems like misfortune is actually an excellent opportunity for smart investors to add on their crypto holdings.
Buying the dips investment strategy is perfect for a bull market or a stagnant market. In this case, we are in the latter. You have to go back to more than a year to see the last time BTC traded below $5,600. Also, you have to go back to September 5, to find the last time the top crypto coin traded above $7,000, more specifically at $7,378. Between Sep 5 and Nov 14 BTC has stagnated at the $6,000 – $6,900 range.
It’s not Bitcoin only that presents an excellent opportunity to make some good returns once the market bounces back. The same case applies to the other top cryptocurrencies as you can see with the table above.
How buying the dips works
- Start by buying incrementally as the prices go down. Aim at creating an average position and buy some more as the price decreases further.
- You can wait until the price settles or even shows signs of recovering and buy at that point.
- You can set buy orders at lower prices which are lower than current prices and wait for them to fill. A strategy that works well is setting buys just before historic support levels. They are also known as psychological levels. Prices tend always to bounce quickly once they hit these levels.
Do you agree that this an opportunity for crypto investors to buy the dip? Share your thoughts in the comment section below.