Experts warn new investors of the volatility of the market. Hence, I urge you to invest with caution. The recent Dip in the crypto market was due to China’s current legislation. The Asian Giant, ordering the shutdown of Bitcoin mining in Sichuan Province, made all cryptocurrency transactions illegal, causing plummeting crypto market prices. Mining companies had to pack away due to the new regulations. Consequently, it led to a drop in the costs of the cryptocurrency. Asides from that, Tesla rescinding its acceptance of bitcoin as legal tender due to fossil fuel used by mining companies contributed mainly to the recent Dip.
The most significant blow to the market happened when China made all crypto transactions illegal. It led the Central Bank of China to ban all cryptographic money, leading to a significant disruption in the market globally.
After years of high turnover, the crypto market is down and is suffering a great degree of price instability. According to Coinbase.com, bitcoin and other top coins suffer a significant loss. Despite the downtown the crypto market is experiencing, there are few things we can learn from it.
Lessons To Learn From the Dip
After many huge losses experienced by investors globally, a piece of friendly advice to future investors won’t do any harm. ‘Buy the dip’ is a famous phrase among crypto enthusiasts. But we have seen cases where you buy the Dip, and it keeps dipping. Funny but true; we saw something similar with Dogecoin after Musk’s pump and dump action.
Let’s quickly see what we can learn from this situation.
Always listen to financial analysts and Experts: Though cryptocurrency has come to stay. We mustn’t get caught up with the hype. We should study the market accurately and do our technical analysis. However, if technical analysis is complicated, you can look for a cryptocurrency expert on YouTube, Twitter, or Instagram. It would help guide your choices. You would know when to invest or to refrain from investing.
Have faith in the process: After listening to different podcasts on cryptocurrency or reading journals, the Dip still met you. There is no need to panic selling. Just calm your nerves, knowing that it will surge soon next. Cryptocurrency is the new normal, so be rest assured that undermining the global market fluctuations would still bounce back.
Don’t invest your emotions in it: Your heart indeed is where your money is. But for cryptocurrency, you would have to change that narrative due to the market’s volatility. You would have to stay alive to enjoy the future rise. So, Experts advise you ;
- Invest the money you can readily lose.
- Don’t put much emotion into it
- Be optimistic about the market.
What Does Buying the Dip Mean?
Investors and traders look at this period as an advantage to them. Many feel it is an excellent time to purchase many assets considering prices are low on a short-term basis, and over time, the value would bounce back. Though buying the Dip might be profitable during an uptrend but might be unfavorable in a downtrend.
Buying the Dip is based on the theory of price waves. But we should understand that purchasing the Dip is never a sure way to make a profit.
Furthermore, when buying the Dip in cryptocurrency, you must understand that the market is volatile and highly unpredictable hence,
- Please buy it once you are ready. Do not procrastinate. Please don’t wait for a further dip in case it doesn’t.
- Reduce the amount you want to invest.
- Know why you want to invest
- Understand that this is not a guaranteed trade strategy to make many turnovers.
Now you know what buying the Dip is. Let’s see cryptocurrency you can buy.
Cryptocurrency To Buy During The Dip
The choice of the cryptocurrency to purchase during this period can be overwhelming because of the numerous coins that went down. However, there are factors to watch out for that would help select the right coins. They are;
- Price history
- Market capitalization
- Developer’s action
- Community’s action
Here are the top 10 cryptocurrencies to buy
- Bitcoin: The price of Bitcoin as of 3rd January stood at $ 46000. If you take the statistics of its growth from May 2016 till date, it would have grown by 9200%. Bitcoin has a market capitalization of 882 billion.
- Ethereum: It is the favorite coin for developers. It is suitable for smart contracts and NFTs.It has a market capitalization of $447billion. Ethereum is another coin that has shown prospects. From April 2016 till date, we have seen its price from$11 to $3700.It is a $33,500% growth.
- Binance coin: It is majorly for trading on the Binance Exchange. Its market capital stands at $86 billion. As of 2017, the Binance coin was about $0.17, but it is currently at $520. It shows an increase of about 520,000%.
- Tether: This is the only coin that has the backing of a fiat currency. It is known as a stable coin because of its legal support. Tether has a market capitalization of over $78 billion. It is a favorite for investors.
- Solana; there, Solana has a design that helps to facilitate defi,dapps, and smart contracts. It has a market capitalization of $52billion. Solana uses a hybrid proof of stake for the fast processing of transactions. After its launch, it was $0.77, and currently, it stands at and. It has a growth rate of 22,000%.
The Dip should not cause fear in your heart. But with the right information and proper guidance, you will get the best out of this period.