Here is a basic guide to successfully “buying the dip”:
Steps to Buying the Dip
1. Evaluate Key Supports:
• Identify critical levels where the price could stabilize. For example:
• Bitcoin (BTC): It could have support at $88,000-$90,000 depending on the current scenario.
• Altcoins: Look for accumulation zones based on Fibonacci levels or past resistances turned into supports.
2. Divide your Capital:
• Don't invest everything at once. Make staggered purchases (DCA - Dollar Cost Averaging) at several levels. This reduces the risk of entering too early.
3. Monitor Technical Indicators:
• RSI: An RSI below 30 indicates overselling and a possible bounce.
• Volume: An increase in volume can signal that large investors are accumulating.
4. Set Stops:
• Always use stop-losses to protect yourself in case the market breaks support levels unexpectedly.
5. Think Long-Term:
• If you are confident in the asset, this drop could be an opportunity to accumulate in preparation for the next rise.
Important Warning
The market can be unpredictable, especially in manipulated or highly volatile events. Only buy what you are willing to hold for the long term or risk in the short term.