It’s Time to Buy the Dip?!
Just like the traditional sock market over the past ten years, the historical perspective shows the most profitable strategy in Bitcoin has been “buying the dip.” This means that when the price drops notably, one purchases some coin, holds it, and later on when the price rebounds, sells it. The Bitcoin price has historically walked its way up the market capitalization stairs, having sold well beneath a penny when it first found itself on fiat exchanges.
Those in this game for any length of time can tell you that these drops often precede rises. Nobody’s clear on why the whole of the crypto market has been taking a beating, but certainly profit taking has played a role.
Buying Season is Open
Bitcoin makes up nearly (or sometimes, more than) half the market capitalization of crypto-currencies as a whole. It and a few others are the first on the tongues of people expressing a new interest in the future of money, and it also has the most options for buying and selling with fiat currencies. In fact, for most crypto-currencies, Bitcoin is the route to fiat returns.
Thus, it doesn’t take a veteran market analyst to tell you: buying season is upon us. If the price continues to trend lower, it will eventually hit a critical mass where it may go much lower. If that doesn’t happen, then what we’re seeing is decidedly a “dip.” In either case, history shows us that buying Bitcoin and Alt-coins when down is a solid strategy to realize good returns at a later time. It’s easier than ever to do, and unless you’re planning to make a many-million-dollar purchase, a price change of even $2-300 can be weathered, and before long, selling season will return.
Timing one’s purchase can be difficult. We are not here to instill Fear Of Missing Out (FOMO), but at the same time, there’s really no telling in the crypto market just how long a buy window will remain open. Analysts and many believe that Bitcoin is still very much in a price discovery phase overall, owing in part to the continual inflation brought on by mining rewards. Although it probably would be unworkable to assert that no true price of Bitcoin can be found until all the block rewards have effectively been exhausted, it is true that down markets are made worse by the hourly introduction of newly mined coins.
Whatever happens, those looking for a chance to get in on the crypto market might take note of the discount prices we’re seeing across the board, and plan or make their move accordingly before they regret not doing so later.