The crypto market is now in a waiting and position-accumulating phase. Data from analytical services indicate that buyers’ activity is significantly higher than sellers’. This is likely influenced by the world’s difficult economic and political situation. Investors see some kind of salvation in precious metals and cryptocurrencies. The existing geopolitical risks certainly affect the cryptocurrency market but in different directions. On the one hand, some investors leave risky assets amid uncertainties. Meanwhile, geopolitical hedge funds’ investments in cryptocurrency are intriguing from a technological viewpoint.
Perhaps Bitcoin has already bottomed out in the context of the current situation. However, anything can still happen, and that “anything” can affect the price of the world’s first cryptocurrency for better or worse. If the world’s situation starts to improve, Bitcoin will grow. According to all investment canons, any drawdown is a good opportunity to buy for the long term. Therefore, current levels can be called favorable and maybe a good time to buy crypto.
This article will consider the idea of a crypto dip and what it takes to know that the market is at its lows. In addition, we will cover essential tips on buying assets when the market is at its bottom. Ultimately, we will look at 5 cryptocurrency projects worth investing in when the market bottoms to make a profit.
A crypto dip is a situation when the majority of crypto assets in the market are in a bearish trend and lose a significant percentage of their value, thereby reducing the overall capitalization of the crypto market. As a result, the price of crypto assets gradually finds itself on the border of the minimum values of its price for a certain period. This phenomenon is cyclical and repeats periodically during serious economic, political, and geographical shocks.
Historically, the cryptocurrency market has experienced serious declines due to various events. One such event was the outbreak of the COVID-19 pandemic. Also, the crypto market is highly volatile due to news about all sorts of restrictions on using cryptocurrencies worldwide.
At the moment, most of those in the “support lobby” believe that the cryptocurrency market is undergoing a difficult period amid the crisis situation in the world, but this is just the beginning of a new boom. Despite all the events, cryptocurrencies are still an excellent way to diversify your investment portfolio. Many investors are just used to high market volatility and consider these events a “global sell-off.” Such investors believe that now is a good time to buy crypto.
All methods of determining the bottom can be divided into two groups: fundamental and technical analysis. The first relates to various economic occurrences, geopolitics, and social life. For example, fundamental factors include:
This raises a logical question: which of the events are really important? Here each investor is guided by his own experience and personal analytics. For example, changes in monetary policy. The high-tech sector has historically negatively viewed the U.S. Federal Reserve’s rate hike. Or, another example, is the beginning of military operations in a particular part of the world. Sometimes such events lead to an increase in the price of gold and other protective assets because, in conditions of economic uncertainty, people are trying, if not to multiply, then at least to protect their savings from recession or a possible default.
The ways to determine the bottom using technical analysis are no less diverse. Many technical indicators are successfully used by traders. Here are just a few of them:
Financiers use them to find the “golden cross.” In this situation, a short average, for example, a five-day average, crosses the long average, such as a fifty-day average, from the bottom upward. This can signal an impending rise in the value of the asset.
Each conditional “wave” on the value chart is calculated by special coefficients. By multiplying the values, traders obtain the price where they expect a reversal.
Since all prices on the stock market are not static and range from a minimum to a maximum for a certain period of time, one can try to predict future values based on past data. Extrema, or the peak values reflected on the candlestick chart, are considered.
So, how to invest in Bitcoin and make money? What does it take to buy the crypto dip?
It’s worth saying that the best trading strategy in any market is: hope for the best, prepare for the worst. While most of the protective rules are preliminary work that should be done at the start of an investment in assets at the bottom, a few fundamental tips will help you save your investment.
Answering the question “when to buy crypto?” is not as easy as it seems. Before investing in crypto assets, you must thoroughly analyze and decide on several things. Below are a few tips for sticking to before buying a crypto dip.
Any project can seem extremely promising. But more is needed to guarantee its success in the future. An idea can be poorly implemented, fail to find application, fade out against the competition, or even be a product of cheaters. Therefore, such investments are of a high-risk nature.
To buy crypto assets, you will need funds. It is better to decide in advance how much money you are willing to invest in a particular asset. Once you have decided on a budget, you need to move on to the next step and decide which assets you would like to buy.
There are almost 8,000 tokens on the crypto market. While it is difficult to understand which one of them can bring a serious profit in the long run, it is certainly possible. It is very important to pay attention to a number of signs that distinguish a project with great potential from unpromising projects.
The cryptocurrency market is highly volatile. Despite this already very obvious fact, many investors forget about it. Volatility can not only destroy all capital, but also play into your hands. You have to use limit orders in order not to miss the chance and buy the asset at the lowest price. A limit order will be executed instantly when the market reaches the price you set. With the proper strategy, this option will help you buy the asset at the minimum price, including situations when a so-called short squeeze occurs in the market.
Crypto dips are characterized by almost all crypto assets losing a high percentage of their value. However, despite this, you should choose your assets carefully and focus on the ones with great prospects. So, what is worth considering for purchase when you are in such a fortunate position? Let’s look at 5 such crypto projects.
The answer to the question “when to buy Bitcoin?” may be very obvious. Many may say that Bitcoin can always be bought, one of the best times to buy it is during the crypto winter or crypto dip.
Bitcoin is a technological breakthrough capable of changing this world, a great tool for investing and increasing capital. Many people have already made a fortune on Bitcoin, while for others it is a great opportunity to duplicate such success.
Ethereum is currently the largest platform for creating smart contracts and decentralized applications (dApps) created by Vitalik Buterin in 2015.
Ethereum remains one of the most popular cryptocurrencies, as indicated by the number of new projects that appear daily on this altcoin network. It should be noted that not only new digital currencies are created on Ethereum, but also NFT tokens, blockchain games, and other promising projects. Also important to note is that the number of DeFi-addresses in the Ethereum network exceeded 4,4 million in February of this year. During the year, the index grew more than 200%.
Cosmos (ATOM) is a decentralized network of independent, parallel blockchains that operate based on Byzantine fault tolerance (BFT) algorithms. These blockchains are able to communicate with each other through the Cosmos network, called the “Internet of Blockchains.
The Cosmos project is actively expanding and attracting new users. Many crypto experts and analysts are positive about the prospects of Cosmos and call this project unique.
Solana is a third-generation blockchain that supports many DeFi solutions, including developing decentralized applications and smart contracts. Unlike other blockchains, Solana uses a hybrid consensus algorithm that combines Proof of History (PoH) with Proof of Share (PoS), allowing the network to perform up to 50,000 transactions per second.
Solana is considered an emerging competitor to Ethereum. Vitalik Buterin’s cryptocurrency is a leader among blockchains with smart contracts, but its network is often overloaded, resulting in higher transfer fees. Solana, meanwhile, offers faster and cheaper transactions.
Avalanche is an open-source platform for launching decentralized applications and deploying public and private blockchains in a single scalable ecosystem.
The Avalanche network consists of three separate blockchains: the X-Chain, C-Chain, and P-Chain. Each chain has a separate target, which is radically different from the approach used by Bitcoin and Ethereum, where all nodes check all transactions. This separation of computational tasks provides higher throughput for Avalanche without sacrificing decentralization.
Investing in cryptocurrencies opens up a sea of opportunities to make money. Now more than ever, the market gives access to a wide variety of trading instruments. Crypto market volatility can be used wisely with the right trading strategy and proper knowledge of its laws and principles. Crypto dips are a familiar phenomenon that offers great opportunities to those who know how to find the perfect moment to enter the market and increase their capital.