The crypto market experienced a dip earlier today; some cryptocurrencies went down more than others. XRP had a mega price surge earlier this week; earlier today, it was still up by 64% on the seven-day chart but was down by 14% on the 24-hour chart.
Some smaller altcoins went down by about 30 to 50%. This dip is the reason why people are always advised that if they are going to buy a coin at a peak price, they should be ready to hold in the long term and be prepared to bear through the dip periods when they start.
We have to keep in mind that the faster the cryptos go up, the harder they crash during dips and bearish periods. A lot of small market capital cryptocurrencies have less than 10,000 holders. As millions of people get into the crypto space and more investors start getting into the smaller altcoins, it does not take many investors to push up these smaller altcoins between 2x to 10x. The Flood of investors into a coin is why some small brand new coins go up quickly.
Simultaneously, we need to be very careful and do extensive research because the faster some of these cryptos rise, the more scammers will come into the market.
Market dips are very good opportunities for one to take advantage of. Market dips are vital because one can get a position in the market and buy coins at a cheaper rate. Taking advantage of dips makes the profits more when a rally and surge begins.
Going all-in on a cryptocurrency, especially the smaller capital ones, at a peak price is never a good idea. Sometimes, it works out, but not all the time. There will be big dips where you wish you would have bought it and waited for those smaller prices.
Small dips are regular and are part of the crypto space’s volatility because people are taking their profits, and they usually do this when there is news that causes them to panic. Dips are natural and healthy for the crypto space. Early investors transitioning their holdings to newer investors willing to hold longer for a higher price target are suitable for the crypto space.
This is why you should get educated in cryptocurrency and do proper research before going into it.
Bitcoin is still over one trillion dollar market capital, and we have to keep in mind that it was not so long ago that the entire crypto space, every coin combined, was barely resulting in one trillion dollars. Bitcoin hitting one trillion dollars and holding it for the past few weeks is a good sign that this morning’s dip is very small compared to what we would have seen, especially as the crypto space continues to grow.
Dips are why many financial advisers and investors abide by and recommend Dollar Cost Averaging (DCA). With Dollar Cost Averaging, you take advantage of the dips and gain more profits than losses.
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