What Is “Buying the Dips” In Cryptocurrency Investing?

Buying the dips
Buying the dips means buying smart.

It is cheesy investment advice, but it is true. You buy low, and you sell high. In altcoins, in particular, this has more meaning than you might think. In fact, buying in the dips can be an even smarter investment than usual when dealing with digital currencies.

Even the most stable investment will see its price leap and slide over the course of a period of time. It does not matter what period you are considering. If you look at the graph of an asset price, it is never a smooth, steadily rising or steadily sinking curve. It is a sawtooth with ups and downs, where the overall trend heads upward or downward.

Buying the dips can be especially effective with investments that see wide price swings, or where you are investing in the long term. You buy low when the market is skittish and sell high when the market is exuberant. With altcoins, often that exuberance is based entirely on trading volume. The more a coin is being bought and sold, the more investors believe it is on the way up, creating a virtuous spiral. Some even theorize that buying in the dips can help stabilize altcoins dependent on the free market.

With altcoins, thinking about the long-term is particularly important. Before spending a dime, you need to look at the overall trend and decide where this altcoin might be heading. If you think that direction is up, then it is worth keeping an eye out for a dip. After all, it is just good financial sense. To learn more about buying strategies for altcoins, subscribe to Bitcoin Market Journal!

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