If you bought the dip you probably made a profitable trade. Find out what buy the dip stands for.
What does “buy the dip” mean?
Buy the dip stands for the process of buying an asset after it has declined in value.
When it comes to the cryptocurrency market, “buy the dip” is used to describe the opportunity of investing in a coin or token that has experienced a short or long-term decline in its price.
By doing so, investors hope to profit from a potential future price increase, at which point they hope to “sell the top”.
When did the term grow in popularity?
Most cryptocurrency investors became familiar with the term after the downtrend of the cryptocurrency market in 2018. It was during that year that most investors learned how risky and speculative the crypto market really is.
But buying a coin or token in a downtrend does not necessarily mean that its price is guaranteed to increase.
At least for the short term, one should have strong emotional intelligence and understand the turbulent nature of the market.