Buy the Dip
Strategy of buying an asset after a temporary price decline.
Beginner-friendly explanation
'Buy the dip' means buying a crypto immediately after its price drops, hoping it quickly recovers. Example: Bitcoin drops by 5%, and you take advantage to buy it cheaper.
Intermediate-level insight
Buying the dip involves leveraging technical pullbacks to enter at a better price. It’s a contrarian approach used in uptrends or range-bound markets. Example: ETH corrects 10% over a few days; you buy the dip anticipating a rebound toward the initial uptrend.
Advanced perspective
'Buy the Dip' strategy requires deep technical analysis to precisely identify key support levels, along with strict risk management (stop loss, sizing) to avoid being trapped in a prolonged downtrend. Example: A professional trader buys the dip only after technical confirmation of a bounce on critical support with increasing volume indicating a likely reversal.
Markets & Order Types
buy the dip, drop, opportunity, rebound, support, contrarian strategy