Are You Too Excited To Buy the Dip?

You wanted to invest in cryptocurrency. Every cryptocurrency price is way lower than it was in 2021. So you are very excited to buy the dip. Out of excitement and emotions, you might do something that you should not do. But when you realize that, you have nothing to do.

Are you going all in and investing everything at once to buy the dip? From an all-time high, the price keeps falling. Some people say this is the bottom. You get into FOMO and feel this is your last chance. So you invest everything at once.

What if the price falls further? You will see another dip, but you will not have any funds to invest at that time. I think you can invest more when you figure out that's the bottom. But you should think twice before investing total capital at once.

You expect a return on your investment. That's why you make an investment in the first place. How long do you plan to hold the assets? If you want to hold the assets for a short period of time, buying the dip may not give you a positive return.

When we think about long-term investment, we usually consider 5 years or more. In this market situation, you have to consider at least 3 years since we see a bull market in crypto every four years. Buying the dip for a short period of time might get you in trouble.

Buying the dip can definitely work. But what you are buying, that's the most important thing. In case you buy something at a low price and keep buying the dip, but if it fails to survive in a bear market, you will lose money. So do your analysis and research, then invest only high conviction assets.

You should have a plan when buying the dip. Things get tough in a bear market. You can see a recession and economic crisis. You have money, but it does not mean you can bring that into the market.

You have to decide how much you will invest and how you will manage your money so that you don't end up in a vulnerable position financially. It is better not to invest more than you can afford to lose.

I'm sharing my thoughts, this is not financial advice. Do your analysis and due diligence before making any investment decision.

So what do you think? Please feel free to leave your comments. Thank you for reading this post. That's it for now. I'll be back with another post.

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