Bitcoin’s Worst Crash In 7 Yrs: Is It Time To Buy The Dip?
March 16, 2020
Bitcoin’s Worst Crash In 7 Yrs: Is It Time To Buy The Dip?
March 16, 2020

Bitcoin has a history of volatility but they all pale in comparison to what happened in the last 24 hours. The king coin bowed down to as it lost nearly 40% of its value in recent trading. The last time something similar happened was back in 2013 when bitcoin plummeted by close to 50% in a day. This signifies Bitcoin’s worst crash in its 7 years. Amid all these fears, is it actually the right time to buy that dip?

Bitcoin is performing like a risk-on asset. The safe-haven and uncorrelated narratives of the top cryptocurrency have been exposed. Liquidity in the bitcoin market is being sucked dry as the cryptocurrency is dangerously close to trading back to $3,000 levels.

In other words, everyone is selling and almost no one is buying.

Source: One at one point, 135 million in liquidity exists on Bitfinex | Source Twitter

Is It Time To Buy That Dip?!

In every chart, no matter which tradable asset, there are recurring wave patterns all the time, on any time frame. Due to the wave nature of price movements, reversals occur frequently. When the price has just fallen in a wave down, usually there will be a point where it bounces back up, more or less.

ALSO READ :  Harry Potter Author J.K. Rowling Wants To Learn On Bitcoin

What goes up – must come down. Highs and lows play together all the time. The recurring lows are used as entry areas in overall upward trends.

That’s what they call “Buy the Dip!“

Buying the dip, means purchasing something when the price goes down, has been a winning strategy for Bitcoin investors since 2009.

The concept is similar to Finance telling you to, “buy when there’s blood on the streets”. It’s the same with cryptocurrency.

If you focus on only buying dips, you can never make too big mistakes. Price should at least go up a little further if you bought shortly above the reversal point of the dip.

That means that in most cases you are able to move up your stop loss order to break even very soon. Then you can simply watch if the trend goes on or if you get stopped out, without the risk of any loss.

ALSO READ :  Misir Mahmudov Says Bitcoin Gives The World ‘Democratization Of Savings’

Many traders call ‘buy the dip’ when they believe that the underlying asset is in a strong long-term uptrend. That seems to be anything but the case when it comes to global stock markets.

The Worst Yet To Come Or The Other Way Round?

However, most analysts believe that the worst is yet to come as the combination of coronavirus fears and an inflated bubble cause deeper losses. However, that shouldn’t be the case with Bitcoin.

With the Bitcoin Halving approaching, many analysts have already confirmed that the number-one cryptocurrency is already firmly back in a bull market.

Moreover, some traders using technical analysis have pointed out that cryptocurrency prices are getting ready for their “next big mark-up.”

If BTC price is indeed set to see massive percentage gains later this year and into 2021, it would make sense for those than can to buy the dip. Bitcoin’s plunge over the weekend and in start-of-week trading might come as a surprise to some.

ALSO READ :  Riot Blockchain Plans To Sell Its Exchange To Focus On Bitcoin Mining Ahead Of The Halving

The price action of mid-2019 might be a foggy memory amid the frantic volatility of financial markets right now. However, back then plenty of commentators were piling in to proclaim that the asset’s time as a creditable safe-haven asset had come.

Conclusion

Where the stock market has investors and traders with decades of experience. The majority of cryptocurrency investors are beginners, or “retail investors”, who are more prone to act emotionally during times of extreme volatility.

Investing in cryptocurrency is an emotional roller coaster, even for experienced traders. Don’t let your emotions control your actions. Stick to your strategy, remember why you bought the coins you did, and don’t panic sell.


Note: As the Crypto News Point Team, we would like to point out that the following information cannot be regarded as a piece of investment advice. We only share our views on the crypto market. Readers are invited to form their own opinions on this article to conduct their own research.


Disclaimer

Crypto News Point a news platform of Digital Notice Media Labs is primarily a regular publication of information, commentary and articles focused extensively on fintech, blockchain technology, cryptocurrency, blockchain-based tokens, cryptocurrency market trends, and trading strategies. We do not provide individually tailored investment advice and does not take a subscriber’s or anyone’s circumstances into consideration when discussing investments, nor is Crypto News Point registered as an investment adviser or broker-dealer in any jurisdiction. Information contained herein is not an offer or solicitation to buy, hold, or sell any digital assets.

Affiliate Disclosure: To help support the work we do here at CNP, we often link to products and deals from around the web. Should you buy some of these, we may get a portion of the sale.

We in generally gather content from the major websites. In every article there is always a clear link and attribution to the source publication. If you have any issue with any of our published content taken from your site, kindly let us know so that we can take appropriate action. In any case, the content of the pages of this website is for your general information and use only. It is subject to change without notice.

You May Also like

Bitcoin Price Hits $100,000

Bitcoin Price Hits $100,000

Bitcoin (BTC) price has hit a massive spike towards $100,000 on its Quarterly Futures chart. It has been reported by the official Binance announcement that a single user placed several large orders over a very short...

Hashing: A Guide For Beginners

Hashing: A Guide For Beginners

Hashing refers to generate a value or values from a string of text by using a mathematical function, and it is a one way to enable security during the process of message transmission when the message is intended for a...

Jafrin Ahmed

Crypto newbie passionate about creating resourceful content on blockchain technology, cryptocurrencies and decentralized apps.
Share This

Share This

Share this post with your friends!