When it comes to Bitcoin dip, we always see a lot of Heebie-jeebies, as crypto newbies and professional traders start panicking due to uncertainties. We also see a lot of dumps by investors to buy stable coins in other to buy the final DIP as they say. The dumping allows the coin to go dipper and dipper. That’s why you see Bitcoin dumping below the intended support zones. For example, Bitcoin went below the 35k zone to hit the 33k zone, this is a result of institutional dumps getting in again at their right timing.
What does Bitcoin dip actually mean?
In the crypto space market actually buys, sells, or consolidates(ranges). This is what the market does at regular intervals. So when there is a sudden buying impulse, there must be a corresponding selling impulse. This is what professional traders call correction and we relate it as a DIP. But is it really a DIP?
The market must obey and respect all the buying and selling regions. The market always reacts to any price action whether positive or negative.
Recall, after the 2021 Bitcoin late Dip, there was a sudden buying impulse that over time pushed the price of Bitcoin so high that it stormed its ATH(All time high) of $67,566 on the 8th of November 2021.
This high impulse move must have an opposite impulse move also, that is why great traders have been having the DIP in mind since last year. Bitcoin deserves to correct its impulse move. Unfortunately, it had to when no one had that in mind.
So with that being explained, let’s look at the things to do during a shocking DIP that took you unawares.
What to do during dips
- Look for a good support zone and buy the DIP: When we say ‘BUY THE DIP’, no one is certain where the DIP will end eventually. So it’s easier done than said. Buying the DIP in reality is in stages. For example, I bought $7k worth of BTC at the 35k region, then Bitcoin Dipped more to the 33k region. I still need to buy at that region, so that immediately the DIP ends at that region. I will recover my capital before it even reaches back to the 35k region. You could also DCA, meaning dollar-cost averaging. A crypto investment strategy is where you invest in a particular coin in bits(not with your total capital)in other to reduce the effect of liquidity on the entire purchase. This is a risk management strategy, especially when you aren’t sure of where the dip will end. That’s what we mean by BUY THE DIP. El Salvador’s president, Nayib Bukele used this method of buying the Dip. As he continued buying the DIP last year at each support zones reached by Bitcoin.
- Never FUD(Fear, uncertainty, and doubt): Now you understand what causes DIP and the main reason behind Bitcoin’s dip. During a dip, you should stay off the market, and get busy with something else. Some people go further to delete their wallet applications. You don’t need to panic during a DIP as you have seen Bitcoin outclassing DIPs to the moon again. Instead, make use of the DIP by buying carefully. Some people never made use of a DIP, which is why the Bitcoin DIP of 2021 still affected them to date.
- Avoid Futures Trading: Futures trading involves buying or selling a crypto asset at a predetermined price at a particular time in the future. The risky nature of future contracts is higher than the risky nature of spot trading or holding. The worst time to trade futures is during dips because you don’t really know where the dip will end or what the market is doing at that point in time. Never trade futures during DIPs, except if you are too sure of the DIP supports. A lot of traders have been liquidated during dip periods, so avoid futures trading during Dip times.
- Be optimistic– Remembering your crypto losses during a dip is the worst decision to make. During a Dip, forget about the past losses and focus on making use of the current Dip. If you remain guilty of your previous crypto mistakes, you will continue in mistakes. During a Dip maintain a Positive approach toward your trading decisions. If you wish to leave the market, leave it for your own good. Never enter a trade because of the noise around you. You may never recover from a crypto dip mistake more than a normal crypto mistake.
- make crypto-related researches-As some people continue to cry or feel bad about the dip, some people use that dip period to research crypto fully. The crypto ecosystem is too broad and a lot of information is online to acquire. If you can’t trade during the Dip instead of staying off the market, why not look for a crypto-related article to learn from? Some of us are always busy with the crypto market and the only time we have to learn is during the Dip periods. So use it wisely.
- Trust the process– The crypto ecosystem is not for the weak-minded, it’s for the strong-hearted. Sometimes it feels like you are always unlucky in your trades. Sure you might be, but everyone cannot win all the time. Trust your trading decisions. If it is profitable, cheers. If it’s not, learn from the mistake. You are always better as time goes by. Remember that it is easier to fall by yourself than by something else.
Conclusion
Crypto Trading is another market of its own, it takes patience and discipline to scale through the market. A wise trader once said ’30 percent of your trading success is in your analysis while the other 70percent is in how you control your emotions. To show the importance of self-control in trading. It’s a red time, make use of it.