During the week, I had just successfully bought an altcoin from Busha and was supposed to have a meeting with a couple of friends and I decided to stop at a pizza house to order some pepperoni pizza. It was going to be a great day, my order was processed quickly and I drove away with my pizza in hand in a couple of minutes. But check this out, I forgot my favorite BBQ chicken dip! I know this seems like such a minor inconvenience but phew, that put a dampener on my day. I mean, that was my chance at getting a "dip" I was 100% happy about.
Oh well, back to the “dip” that matters here; the most disliked word in the crypto universe.
First, let’s break it down. The “Dip” in crypto means a downward decline in the price of cryptocurrency, also called the ‘valley’. So, is “the dip” the villain or a paid actor? What does it mean to buy the dip? How do you beat the dip? Keep reading and you’ll get the answer you need.
A brief history of “The Dip''
Cryptocurrency gained its major investors during the year 2018 and later in 2020. Not too long ago, investors were introduced to the word ‘dip’, after the downward slope of assets in late 2018. This was then regarded as a strong word in the crypto lingos and immediately needed to be taken seriously as we all have learned how risky and speculative the crypto market could be. Now, I know you're thinking, I will just buy the dip, it should come to your notice that buying the dip doesn’t also guarantee that the same coin will rise again. Also worth noting is that cryptocurrency markets are always on the brink of widespread turbulence that ends up making investors nervous while sending all coins into a tailspin. Bitcoin being the acclaimed king of all coins is also the major driving force in the crypto market, especially when a dip in bitcoin inadvertently affects the dip in other singular coins. While this smears on total negativity, studies have shown that the dip has its positive side. For example, in 2020, at the start of the covid-19 era, cryptocurrency surged into the market seeing a rise in investors and investments. However, later on, as the year came to an end, the price came to a record low and some experts advised that people invest and “buy the dip”. As the crypto gods would have it, earlier the following year, bitcoin rose to a record high along with other coins and investors recorded an impressive ROI of over 100%
Cool right? Yeah, the good ol’ days.
So… What Does It Mean to Buy the Dip?
Buying the dip is the process of buying an asset after it declined in value. When it comes to the cryptocurrency market, “buy the dip” is used to describe the opportunity of investing in a coin or token that has experienced a short or long-term decline in its price.
Investors hope to make a profit from this process, and when the coin reaches a record high, they “sell at the top” thereby making a massive profit.
How Do You Beat the Dip?
When a crypto coin you invested in starts to rise, it’s the situation you hoped for, and definitely going to just sit back and watch it multiply. But what about when the going gets tough and the chart is going downward? First, one fallacy I would like to correct here is; going all in, head on and with both feet, when some ‘experts’ mark certain assets as the best to invest in, whether it’s because of its strong stance in the past or because it’s already marked for success. Look, a dip can happen to any coin regardless of its present or past. So, don’t forget the watch phrase for investment, “Do Your Own Research”.
Now that that’s out of the way, let’s go through three (3) tips for defending your investment against the dip:
- HODL: The major mistake people make is selling off immediately there’s a reduction in the value of the cryptocurrency they’re holding. While that may seem like rational thought, it’s always important not to sell your coin below the price you bought it for. When the going gets tough, you need to stay calm and maybe practice your breathing. LOL. Cryptocurrency shouldn’t be seen as a short-term investment and the long run should always be considered in your investment journey. What you can consider doing next time is, HODL, watch the market for stability and then start trading again. Whether that means selling off or buying still, that’s left to you.
- KEEP LEARNING: When you intend to be good at something, it’s important to always want to relearn and keep learning in order to be massively successful at it. For example, if you are new to cryptocurrency, you will need some guidance to start, learn how to grow income with crypto, and the basics of crypto. After that, practice is important as that's how you will gain the necessary experience you need to be a ‘crypto lord’.
- LIMIT BUYING THE DIP: It always looks like rose gold when you don’t have a coin and you see its decline, you’re tempted to ‘buy the dip’. Instead of mindlessly buying a dip of just any coin, research and instead consider investing in coins with a potential to grow; like Apecoin.
Is “the dip” a villain or a paid actor?
This brings us back to our question of the day. Truth is, it depends on what side of the room you’re standing on. I believe it takes more than just a speculative mind to come to any conclusion whatsoever. For someone who’s pessimistic, the word ‘dip’ may actually be one of the most hated words in their dictionary, while on the other side of the coin is seen as a strategy. My take is, that it’s a paid actor; as much as it sends a panic wave whenever it affects our favorite coin, the uncertainty about it either going up or down gives me the same chill a thriller movie does, the moment one of your favorite actors is in a life or death scene and you are so scared of what may happen soon. That’s how I view this and I believe it’s the entire trading font that matters at the end and not just total reliability on a coin or rather in my analogy the uncertain movie scene. It comes, does what it’s meant to do, and eventually disappears! What matters is at the end, you gain valuable experience on your next move going forward in your crypto journey.
When a crypto dip is mentioned, a lot of people automatically write it off as a bad thing and while that may be true, the glass can be half full or half empty. For some of us though, it’s definitely half full; as the dip provides us an opportunity to up our investments. However, whatever side of the room you are, here’s me sending virtual hugs to all investors, we need it. 😂
That said, what’s your take? The dip, villain, or paid actor?
Let us know in the comment box below 👇