The Cryptocurrency market has taken quite the plunge recently as the value of Bitcoin and other digital currencies have dropped in value. This market crash is called “the dip”. So, you may be wondering, is buying the Bitcoin dip a smart move? Yes, it is, and it is a very smart move to make.
This article will help you know if now is the best time to invest with Bitcoins. So, keep reading this post to find out.
What is Bitcoin’s Current Value in the Dip?
At the time of writing this article, the value of Bitcoin has dropped to $20,870. That is a loss of about -2.2% over the last few days. The value seems to be at a steady decline as it struggles to hold above $20,000 and it may drop further, marking yet another highlight of a bear market for cryptocurrency.
What Causes the Bitcoin Dip?
The cryptocurrency market, in general, is very volatile, leading to a rise and fall in its prices at any given time. Bitcoin, like other investments, relies on the law of supply and demand. The role of investors is also an important part of the crypto market. Investors, influencers, business moguls and even the media can influence the direction of the market.
When there is a high level of speculation, investors may be wary of the risk and liquidation of their assets may influence others to panic. Luckily, there are limits to the amount that can be liquidated within a day. Otherwise, excessive liquidation would impact the whole market.
In addition, the maximum total supply of Bitcoin is about 21 million. The closer it gets to these coins being maxed out, the higher the price. However, according to Investopedia, as of January 2022, 18.9 million Bitcoins have been issued.
What You Should Know about “Buying the Bitcoin Dip”
First of all, Cryptocurrency markets are generally known to be volatile. The route most people take is to purchase Bitcoin at a dip price with the expectation that Bitcoin prices would regain stability. However, there is also the possibility that the value could fall way lower, leaving your investment in the mud.
When this happens, you could choose to hold your Bitcoin until you see a price rise and then you get your profit. This move is not for the faint of heart though because a bull market where Bitcoin gains value could take several months or years to attain.
So, starting your investment portfolio with Bitcoins even at any price is taking a risk. It is important to risk only what you can handle or spare. Calculated risks where you have something to fall back on are the wisest ones to make.
When you invest what you can afford to risk, you reduce the whiplash you might experience from the market volatility.
When is the Best Time to Buy Bitcoin?
So, with all that has been said, when is the best time to buy Bitcoin? Well, some experts and financial analysts have taken some time to come up with answers to this question. According to research and market analysis, the following are the best times to buy Bitcoin.
Try to purchase Bitcoin when the demand for it isn’t very high. As the law of demand and supply has a major role to play in the price and availability. An increase in the demand for Bitcoin can also yield an increase in the price. So, you may want to buy Bitcoin when the demand is lower and the prices are lower too.
The time of your purchase also matters. Try to get your trading done before major business hours because there will be more market activity if you wait till regular business hours. The earlier you trade, the better your chances of purchasing at a lower price compared to other hours. When you do this, you get to spend less cash to purchase Bitcoin.
Conclusion – Is Buying The Bitcoin Dip A Smart Move?
As a potential investor in Bitcoin or even if you are already familiar with the process, you need to observe the market trends, history and fluctuations. A careful study of the charts can show the pattern of the fall and rise of Bitcoin prices.
You can use these to make your own informed decision about whether or not buying the Bitcoin dip is a smart move for you to make.
You will be taking this risk with your finances, so it is important for you to be confident in your knowledge of the cryptocurrency market before you make your move to invest your money with Bitcoins.
Get informed about the basic knowledge of cryptocurrency and then with time, progress to learning the technical aspects. This way, you can get the most value out of the crypto market, especially when you buy Bitcoin in the dip.