What does that mean?
Well, there are two ways to buy or sell crypto a asset. You can buy crypto with crypto or you can buy crypto with FIAT.
When I say buy the dip, it usually means buying crypto with FIAT.
This is, of course, the more difficult way of trading because you need a second party to do that and sometimes people argue about the published price. But there is profit to be had buying the dip using worthless paper dollars.
I would never recommend buying through Coinbase or any other service that changes FIAT into crypto or vice versa. If you trade substantial amounts like I do, it is very difficult to trade without triggering some sort of flag in the KYC at those kinds of sites.
Today is one of those days that I would like to buy the dip, but I am not in dollars this month. I would sell gold, but then I would be selling something that is in a dip, to buy something that is in a dip. Do you get my gut feeling?
If I had dollars laying around, I would contact people in my circles and meet for a coffee to buy their allegedly degraded bitcoins.
This used to be a great way to buy dips. Pre-2017, most bitcoin bull runs were funded by the alternative cryptos. People would dump their litecoin, dogecoin, dash, and potcoin to get in on the uptrend. It was a golden age! I could buy thousands of spitcoins while bitcoin was peaking, only to sell back into bitcoin when it dipped - otherwise known as buying the bitcoin dip.
Government manipulated futures trading of bitcoin takes the supply and demand aspect out of the equation. So it is rare to find a situation where buying the dip is possible with other crypto.
Example 1:
Bitcoin moves from $20k to $100k
Litecoin moves from $100 to $50
You sell all your litecoin into bitcoin.
Prices revert a month later.
So called "stable coins" would do the trick but I am not in those, just the same as I am not in dollars. The dollar is anything but stable. It is printable, inflammable, tankable, confiscatable, washable, wearable, but not stable.
arrows show movement of money for the given examples
Buy the dip can be done with crypto though. On the odd chance that you find an asset that is up, in dollar terms, while bitcoin is in a dip then you can trade out of said crypto and get some bitcoin.
Example 2:
Two days ago:
BTC $20k, XRP $0.75
Today:
Bitcoin is down 20% - let's say it is at $16,000 each.
Ripple is up big 20% and xrp rises to $1.00 each.
In this case you can surely sell your ripple out to bitcoin obtaining bitcoin at a much lower price than you would have yesterday.
Note: This is financial advice. Everything has it own way, nature, or pattern. Once you discover the nature of a thing, you can use that information to your advantage without harming anyone else in the process.
