Bitcoin and Cryptocurrency Drop: Should You Buy the Dip?
Bitcoin and cryptocurrency have been in the news a lot recently. A number of countries are banning them, while others are embracing them as their own currency or investment strategy. The crypto market is volatile and unpredictable at the moment, which results in Bitcoin dips, but that doesn't mean you should avoid it altogether. In fact, you might be able to take advantage of the current situation to increase your financial gain. In this blog post, we will discuss whether or not you should buy Bitcoin now to take advantage before the price increases again.
Why Did Bitcoin Prices Drop?
In the last few weeks, cryptocurrency prices have been dropping significantly after Elon Musk announced that he would not accept Bitcoin as payment for Tesla due to the environmental impact of mining Bitcoin. This impacted the dip crypto because panicked investors and the price of both Bitcoin fell by 30%. However, after Elon Musk's next set of tweets, telling customers to hold, the prices slowly started to rise again.
This fluctuation signaled to other countries how volatile the cryptocurrency market can be, which led to a new wave of panic that many countries would ban the selling and purchasing of it. Countries like China, Japan, and South Korea have all banned Bitcoin in recent months as they tightened regulations on cryptocurrencies in general.
This has led to rapid selling among investors who believe these bans will lead to stricter regulation worldwide. However, some investors took this opportunity to buy during the dip in crypto, confident that they would be able to make their money back.
What Does "Buy the Dip" Mean?
Buying the Drip is a great strategy to get ahead of the inevitable growth of Bitcoin. However, you need to buy your crypto at the right time. Bitcoin's price has been trending downwards for a while now, and many investors have lost some money waiting for it to bottom out.
The last thing that an investor wants is to buy Bitcoin when prices are high again—only to see them fall back down in a matter of hours or days later. Instead, investors should wait until they can identify minor signs of growth before investing their money into Bitcoin.
How Can I Tell When Bitcoin Has Hit Its Lowest Point?
There are many ways to ensure you're buying at the best point possible, and most of it only takes a little bit of time and research. Bitcoin is a currency that isn't regulated by any government, so there's no 100% sure way to tell when the low point will be without waiting for it to happen.
However, if you're an experienced investor or trader in this type of market before, you may have some good clues as to what might come next. Here are a few ways you can ensure you're buying the dip at the right time.
1. Study the Charts
One of the most popular ways to make this determination is by looking at charts. One chart, in particular, called an Ichimoku Cloud, shows a 50-day breakdown for Bitcoin’s price movement and has been proven accurate with predicting future prices up to 90% of the time. Besides reading other programs' interpretations, watching the charts yourself, and understanding how to interpret them can help you decide if it's an excellent time to buy or whether you should wait a little longer for the ultimate low.
2. Study the Market
Knowing what kind of market Bitcoin and cryptocurrency are in can also be a good sign to buy the dip. If Bitcoin's been up for weeks, chances are it may not fall as far as you think, and buying now will likely provide more bang for your buck.
If Bitcoin has been down for weeks, buying now will probably be better than waiting in hopes of an even lower price. Bitcoin and cryptocurrency markets can be volatile and unpredictable at times. It may take more patience or luck to get the lowest prices when Bitcoin is on its way up instead of on its way back down again.
3. Look for Recurring Trends
Does the price of Bitcoin go down when specific news is released, like a new Elon Musk tweet or policy changes from the Chinese government? Understanding the reasons behind the dips can help ensure you're buying at the best time by allowing you to be strategic in your purchases.
Buy Your Bitcoin with a Reliable Exchange
Hundreds of cryptocurrency exchange platforms exist globally. Before you choose to trade coins on any one platform, you need first to decide what features are most important to you. When you're looking to purchase Bitcoin, you'll want to pick an exchange that's reliable, makes it easy to trade, and processes your cryptocurrency immediately as soon as you order.
At Paydepot, we offer a simple way to buy Bitcoin with a credit card or cash. Whether you want to buy directly on the internet, or you want to use one of our convenient ATMs, we have you covered. So get started today by purchasing Bitcoin during the dip, so you can reap the benefits.
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