Some of the most popular questions I get from people include "which coin is good to buy right now?" and "when should I buy so and so coin?"
Though there's no magic selling price or a way to determine the best time to buy a particular coin.
But we can apply common sense analysis based on experience, and some historical data to guide us in determining the best time to buy a particular coin or token.
And in this post, I will be sharing with you the various broad factors that affect the criteria for determining when to buy a coin.
And the specific criteria you use in making the decision of when to buy.
When to buy a coin under various market conditions
Before we discuss the specific criteria for determining when to buy a particular coin, let's first examine the various broad factors that affect these criteria.
Are we in a bear or bull market? Then you should consider buying in gradually as the market goes lower.
Is the coin's price majorly being driven by fundamentals or speculation? If by fundamentals then you know its a safe investment regardless of the current market price.
Does the coin have a low or large market cap? Small caps have the biggest and unpredictable swings in either direction.
What is the project development situation? A team that's constantly building and forming new partnerships is more likely to succeed.
Are you investing for the short or long term? Your buying price right now is not so relevant if you're buying for long term holding. But if you're looking for a quick trade, you will want to buy as close to the bottom as possible.
As you can see, our question seems very simple to answer, but a lot of factors goes into determining what that simple answer will be.
So without much ado, let's discuss the details one after another.
When to buy tip #1: During a dip
The best time to buy any crypto is in a dip. The second best time is in the next dip.
I thought this is already obvious.
Yes! it probably is.
But not obvious enough.
There's a popular saying in real estate investing...
Money is made when you buy, not when you sell.
It's hard to try and time the market in order to buy the floor (the lowest price) but that's rarely possible.
When the sellers (bears) take control of the market. And the street is full of blood. And children, parents, wives and husbands are shouting "admin why dump?".
That is the best time to begin accumulating.
Because dips are the buying and pumps are for the selling.
Soon enough, sellers, bears, weak hands (whatever you wish to call them) will run out of coins to sell and will buy lower to ride the next wave of a pump.
Make sure you're on the pump train when it starts moving again.
And that's only possible if you bought the dip.
This is mostly good in a bear market when the entire cryptocurrency market is suffering from a dump.
You may want to employ the DCA strategy and not put in all your money at once.
For example, you can buy the dip with 20% of your portfolio after every 10%, 15%, 20%, 25% drop etc.
Except you're buying a scam or pure shitcoin, the coin should find a bottom after 2 to 3 consecutive 15% drop.
For example, if Bitcoin drops by say 40% to 70% within a few months or even a week I will surely begin accumulating a lot.
When to buy tip #2: After a correction
What we call a c correction is very similar to a dip.
The main difference is that a correction is usually a sharp decline in the price of a coin after a big pump.
This usually occurs because people who bought (the dip) earlier are "taking profit".
And they will buy lower again to resume the pump.
Make sure you join the train on the next pump mission.
But that's only possible if you caught and bought the correction.
But how do you determine what price point is good to buy in a correction?
In a bull market for example and if you're buying a coin with solid fundamentals (not a pump and dump) a 15% to 25% or more price decrease on the 24-hour timeframe is a good buy.
For example, if Ethereum should drop by 15% within any 24 hours after a massive pump, I will use all disposable cash to buy the correction.
Because I believe it will bounce back.
But you must take note of a few important things before doing this:
It must not be a pump and dump coin (e.g Doge).
The price drop must not be caused by serious negative news. (e.g SEC suing Ripple over XRP).
The project is undergoing a healthy development and the team is intact.
The price drop is a normal market situation.
It's not a microcap coin. You'll most likely see another 25% fall after the first 15% correction before it starts going up again.
If the fall is caused by any of the above, you may want to short the coin rather than buying.
When to buy tip #3: When it's still new and young
When you find a new project with good fundamentals and use cases buy it as early as possible.
For example, I discovered the FUEL token when it launched a vault on Beefy.Finane and I bought it immediately without doing much research.
The project is new with a very tiny market cap.
It's a yield optimizer on BSC and that means that its potential to grow from that point was higher than the downsides
The team was obviously not a scam. Even though my first encounter with them was a "fight" I still invested. If they're not scammers then I know there's a greater chance of the token doing.
So I bought it and started farming it and held through the dip when it fell from my buying price of about $80 to $36.
And it's currently hovering around $500 and I'm still HODLing.
Invest in a good project and don't be too quick to sell.
The same thing with SafePal token. It had the fundamentals and all the hypes. I bought it a few hours after Binance listing at $1.3.
It went to $4.5+ and currently hovering around 2.6 and I'm still HODLing along with my airdrop.
I saw these projects as potential flyers and they didn't disappoint.
Even if they dip after you bought, If you HODL you'll most likely come out a winner.
These are just success stories.
I have losers too such as when I invested in Rocket Token (RCKT) but I cut my losses when I saw that the team was totally useless.
When you catch yourself invested in such projects, cut your losses as soon as possible and move on.
You will notice that all along, I didn't include the possibility of a totally catastrophic event that could wipe away crypto.
That is because I am Perma bull and I strongly believe that no matter how many times crypto dies, we will resurrect.
Thus the reason why I encourage buying massive dips.
But that does not mean a particular good cryptocurrency (e.g Telegram token) could be totally "killed".
More so, I could be totally wrong in some circumstances. And when that happens, you will have to make the hard decision of cutting losses.
There's a lot of risk in the cryptocurrency "business" and I don't want you to discount that.
But note that without risks there wouldn't be many rewards.
So when the next buying opportunity comes, be brave. Make the move. Buy that new gem or that big dip.
How do you determine when to buy a particular coin? Share with us in the comments section below.