Key Takeaways
- “Buying the dip” is a strategy of buying an asset (stock, crypto, etc.) after its price goes down.
- The goal here is to buy the asset at a discount, hoping it rebounds for future profit.
- It also lowers your average cost per share if the price recovers.
One of the most essential concepts in crypto investing is buying when the price is low. This allows you to make the most profit when the prices go back up.
Now, that might sound like common sense, but it is more challenging than it actually sounds.
Bear Markets Or “Crypto Winter”
By far, the most profitable time to be buying is during what we call “crypto winter.”
We have had several of these crypto winters in the past:
- 2015 – 2016
- 2018 – 2019
- 2022 – 2023
During those periods, prices dropped 70-80%, and analysts would appear on the news, saying that crypto was basically dead.
Of course, the crypto markets rebounded each time. Now, we are seeing all-time high prices for Bitcoin and some other cryptocurrencies.
How Do You Buy The Dip In A Bull Market?
Even during a bullish year like 2024, we still see occasional crashes when the market goes cold. On average, there have been around 20 individual days during bull market years where the prices have dropped by greater than 6%.
Your strategy, therefore, should be to wait for days like that when you buy.
Final Thoughts
Although it might seem scary, you will find some great investments at bargain prices if you dig deep enough.
