Buying a coin that has already made a tangible gain is always a scare for cryptocurrency investors. No one wishes to buy the top, done that a couple of times myself and was full of regrets…as usual. The greens are amazing, but that is only true if you are already a holder; otherwise, the reverse is the case.
For intending investors, the dip time is usually the best time to buy. Maybe the coin is just pulling the strings, and you know…as the saying goes, ‘it always shines after the dark’. So, if it’s dip time, then it is buying time…but that’s not always the case.
The normal idea is always to buy the dip and hope it doesn’t dip further from your purchase price. Moves like this have come out good sometimes; however, many times, the current dip point is just the tip of the iceberg, as more dip comes after the initial dip and leaves those who bought the initial dip at a loss. Ready to buy the dip? Maybe you should give it a little thought and invest some time in doing a little research.
Why the dip?
Fluctuation of cryptocurrency prices is a common and normal event; this is in congruence with the market dynamics. Basically, nothing stays green forever; after some good gains come price corrections and pullbacks. Hence, it is normal for crypto prices to jump between gains and losses at intervals.
However, sometimes, these price drops exceed normal pullback ranges and don’t occur due to normal market dynamics but due to certain other market forces, including project updates, team activities, or FUDs. Investors are always on the lookout for dips of this sort, as the price tends to dip so much, pulling up to 70% price drops. ‘Dips of this sort bring the biggest gains, ’ but wait! Why the dip? Why has the price dropped this much?
It is very important to study the events that resulted in this sudden slash in price. Getting greedy when others are fearful is unarguably a good move, but sometimes this could also backfire; in reality, this move is always risky. Taking time to make certain considerations before ‘getting greedy’ increases your chances of averting some disasters. Price may dip badly in cases of irregular acts by the team behind the project you are invested in; this always drives the price nuts and could dip to its last point. I mean, the team is gone!
In certain other cases, Fear, uncertainty, and doubt (FUD) assertions could lead to grave effects on the value of a project, while these FUDs are untrue most time; they always have negative effects on their victim project. In this case, verifying the validity of these statements may be of benefit in your decision-making process. If the ‘FUDs’ are valid, then they are certainly not FUDs but facts that should be considered seriously.
What are the chances of pulling a recovery?
Regardless of what caused the dip in price, there always exists a chance for a recovery, especially in the crypto space… Impossible is just a word thrown around for no reason. No matter how bad a project dipped, it could turn its fortunes around if the right moves are made. But what are the chances of the right moves being made, and what are the possibilities of the market reacting as expected towards these moves?
Pulling a recovery depends on two factors: the project making the right moves and the market reacting positively to its moves; a recovery cannot happen without these two factors being met…satisfactorily. Here, taking a good look at the team behind the project and their reaction to the dip is surely an important move to make. How is the team reacting to the drop in value of their project, and how do they hope to get out of the ditch? In a situation where the team has already ‘exit scammed,’ then this is not possible; a recovery is almost impossible. However, as I already stated, ‘impossibility’ is an illusion in the crypto space. But if a project team is gone for real, then recovery is far-fetched.
On the other hand, the chances of the market reacting positively to the moves made by the team depend on the effect of the dip on the reputation of the project. It is always tough to regain lost trust. It is justifiable for an investor to abandon a project after a huge price drop; it is hard to earn trust in the first place, but it is even harder to get it back after losing it. This is the case in situations like this, the market usually gets cold towards a project that got them ‘rekt’ in the past.
Regaining the attention and love of the market requires constant development from the project, but this cannot happen without a solid team, or the team getting solid after the drop. Considering the chances of the team going through this journey before buying the dip could prove resourceful to you as an investor.
