when is the best time to buy Bitcoin?
This is maybe the biggest question for those who trade bitcoin. when is the best time to buy Bitcoin? and when to sell bitcoin? To be honest, nobody can give you the answer. However, if you are new to cryptocurrency then I can give you some idea about where to start and when to buy your first bitcoin?
Now please remember if you are serious about investing in cryptocurrency then you need a lot more research than just to read this article. The information I am about to give you is just the tip of the iceberg. But I do hope this article will give you the knowledge to help decide your next step. So without further delay let’s go to the main topic.
Buy bitcoin in DIP
Now your first question is, What is DIP? DIP’s full meaning is a drop in price. Meaning when the price is lower you buy bitcoin. Sounds simple enough. But there is more here. If you want to buy bitcoin in DIP then you have to have an understanding of the situation.
First, let’s talk about how to spot a DIP. During the bull run, it’s very possible to drop the price of bitcoin around 5% in a day and 10% in a week. In the case of altcoin, it’s even more true. They can fluctuate between 10% to 20%. This is pretty normal in the crypto world. This means the crypto market is trading sideways. No huge gain or huge loss in value. In simpler words, prices aren’t really going up or down.
However, if bitcoin started losing more than 5% in a day that could be the start of DIP. Normally you would be sure in few days that if it is an actual DIP or just market correction. If it’s a DIP then it could mean two things. A temporary correction meaning the price will rise again quickly or a crash that results in real DIP. You can easily check what’s happening in the crypto market on CoinMarketCap or CoinGecko.
Watch the crypto chart and if you see the price is rising for a year and just dropped for few days then that could simplify a temporary market correction however if you see that price is going down for a week that could indicate a beginning of a DIP.
What causes a DIP?
Now that you know what a DIP is and how to spot it. It’s important to know what causes a DIP. For example, if one of your altcoins starts a DIP because it’s found out to be a scam then no amount of research can save that. But what about legit coins? Let’s talk about the recent DIP of bitcoin. In just a month bitcoin lost half of its value. Prices have gone from 50k to 30k. But why?
Well, the problem with identifying the cause of DIP in crypto is very hard, to say the least. Because it’s almost never one reason. A series of events create a big DIP. Let’s use bitcoin’s recent DIP as an example. The DIP in mid-April 2021 caused by a barrage of bad news. On April 15th Turkey announces it will be banning its crypto payment. Now, this spooked some investors thinking that this could be the start of the government banning cryptocurrency everywhere. Science crypto investors are located around the world not all of them got the news at the same time.
Within 24 hours they knew what’s up and they started panic selling in full force. Now of course that was a big blow and the after a few drops the price stabilized. But right after that news broke out that the USA is looking to increase corporate and capital tax on profit. Higher taxes meaning less profit and people need to pay taxes for their gain. So few investors started selling their stock and BTC. Which led to another DIP on the stock market and cryptomarket. Now please understand this is a simple explanation of bitcoin DIP. There are way more reasons and parts moving in the background.
How low the DIP could go?
Now that you understand what DIP is and what causes it the last thing to do is figure out how low the DIP could go? Of course, a lot of these will depend on the factor that what’s causing the DIP. However, it’s very hard to figure out how low the DIP will actually go what’s the best time to buy Bitcoin?. As I mentioned earlier crypto market is heavily volatile and DIP happens for multiple reasons, not just one.
Fortunately for you, there are some good tools on the internet where you can see the price status of crypto. Search google for Btc price USD chart and you will find it. Now, why the bitcoin chart? It’s very important that follow the bitcoin chart very closely even if you don’t have any intention of buying bitcoin. Why? That’s because whenever bitcoin falls altcoin falls even harder. Bitcoin considered a safe haven for crypto so you have to follow that chart.
Now what to actually see in that chart? In simple words, you need to look for stability. Let me explain. Let’s say Bitcoin price is now 50k and it’s started falling and stuck in 45k. Why? Because most of the new investors bought these coins in 45k. They set crypto trading bot on the condition that if the price falls to 45k buy x amount of bitcoin. That’s why bitcoin got stable on that price point. After finding that spot you have to make a choice decision on your rear ache whether you are willing to buy at that price. In my personal opinion, it’s a bad idea to wait for the lowest DIP point because most likely you will not be able to catch it.
Hopefully, through this article, I was able to give you at least some kind of idea of when to buy or the best time to buy Bitcoin. But as I said at the beginning this is just the tip of the iceberg. If you are really serious about investing in bitcoin then you have to do your own research and make the decision for yourself.