A dip is one of the things you need to know about crypto investment. Digital assets at some points will enter a turbulent stage.
Bitcoin and several other altcoins were the rages in 2021, with several coins reaching all-time highs. BTC, which is the most popular crypto asset, however, had a dip recently.
This got some investors to cry out for their losses while others look to find a way around the crash.
In this post, we’ll discuss how to handle the crypto dip.
What is a Crypto Dip?
A crypto dip is a temporary drop in cryptocurrency prices. This could happen when a particular coin or token is expected to rise in price in the near future.
This dip may be caused by several factors which include adverse market conditions, government actions or result of manipulation.
Dips are commonly used in the expression ‘Buy the Dip’ which is most effective when actively trading as opposed to long-term trading.
What To Do When Crypto Dips?
Here are the things to do when your crypto assets like Bitcoin crashes. They are discussed below;
1. Always remember that crypto currencies are volatile
You have to understand that there would be dramatic gains and losses when investing in crypto assets. For example, BTC recorded high of nearly $20,000 in December 2017. By December 2018, it was trading below $3,500. For crypto experts, the dip of a value of Bitcoin is seen as an opportunity to buy.
2. Ask yourself what amount of money you can put and afford to lose
You shouldn’t take the opportunity to buy low if you’ll not be able to sleep at night because of your crypto holdings. Don’t just buy because of the hype. Make sure that you invest what you can afford to lose. If you’ve carefully and wisely selected your assets, you shouldn’t be moved when the markets drop.
3. Check out what led to the dip
Crypto remains a relatively new technology whose full effects on the worldwide economy are not yet clear. Several factors such as government actions, manipulation, unanticipated events can send prices downward. If your crypto is dipping, you need to examine what’s driving the sell off.
4. Avoid buying large amounts of crypto assets at once
To stay away from the effect of the price drops, it is advisable not to buy large amounts of crypto at once. You can buy small amount every month then just keep doing it. This will help reduce psychological effect of losing a lot when the price goes down.
Also Read- Where To Buy Top 2022 Cryptos In Nigeria
