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What Is Buying The Dip In Crypto?

Considered the best trading strategy for bullruns, or is it?

“Buy the dip” is a commonly used phrase in the financial market especially due to the high volatility of cryptocurrencies, that you buy when the price is low, and sell when the price is high. Actually, it can be a smart move when crypto prices are increasing and if you feel like participating but you were late in placing your orders. Then you can wait for a while until a price correction, or a hiccup, happens and then you buy during the dip before the price stabilizes back again.

  1. It is good to be updated about current news headlines that are bound to impact market prices or some trade rumors that may have a short-term effect to cause a dip. Bad news can sustain a slide while good news can produce a leap. Sometimes it is good to have the intuition of anticipating any news waiting to happen rather than waiting at the newsstands before making a move. You may just miss the bus ride.
  2. Be sure to have an account in a robust exchange so you can trade quickly or set limits to your orders.
  3. Always set limit orders especially when there are no clear directions as to the stability of crypto prices where slippages are highly possible.
  4. Do not put too much emotion whenever you miss an opportunity after the price has stabilized. Remember that the crypto market is highly volatile and all you have to do is to wait until the next downtrend comes around. It is safer that way.
  5. Make the trend your friend by understanding it deeper using the MACD tool, or the divergence and convergence of moving averages. It will help you analyze visually if the market is going bullish or turning bearish. As buy the dips in a bull, keep a close watch on the lurking bear.
  6. Average into a dip by increasing your purchasing as the price gets lower. This will build you a long position or earn you a profit once the price reverses.
  7. Backread the charts and analyze how the price worked its way for an hour, 24 hours, 1 week, 1 month, 3 months, 6 months, and so on, and then set your limit orders close to the highs and lows. You are in for some buying and selling opportunities especially when digital assets are fairly stagnant. This is similar to Fibonacci retracement levels without the technicalities.
  8. It is impossible to perfectly time the bottom or the top so, again, set your stops and better be ready for it. Its part of the game since on the bright side, profits are there for the taking.
  9. Lastly, and again, it is important to know what type of market you are in. Downtrends can last long like weeks or months, and so with bull markets! Dips and rips, too, can last hours or days in a crypto market. One fair advice is, don’t be a bull in a bear market, and don’t be a bear in a bull market.

Conclusion

Remember this, buying the dip will work as long as the general trend is bullish. When Bitcoin reached $20,000. The market turned bearish that in the middle of December 2018, it found itself languishing at $3,120 and finally settling at $4,000.

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