One of the phrases I have heard the most since I started in cryptos is "Buy the dip." As the market dumped, you may wonder if you should make it.
Should you buy the dip?
If you could be sure that Bitcoin will not dump lower, it would make sense. But how can you be sure of that? Let's have a look at the 1 week BTC chart:
Do you think the so-called dip is at 38k$ on that graph, or lower. Look at the volumes, they have not been so low since September 2019... Never forget the volumes... Unfortunately, it seems at the moment that Bitcoin could dump down to 28k$, which was the previous bottom reached last summer. We can hope that Bitcoin will find a support there. But nothing can be guaranteed. So let's have a look at the fundamental issues behind the current crash.
Why does it dump?
Many reasons have been mentioned in the latest news: Kazakhstan mining down, Russia crypto crackdown, US Fed regulations... It is challenging to sort out the real reasons, but the trend is: more bad news than good news, and hence more sellers than buyers. How can we change the trend? We need more good news than bad news. Although there are some positive announcements coming from GAFAs, the good news have to be really striking.
What are the potential striking good news?
Below a few coins for which the upcoming good news could make them rise again:
- GLMR (Moonbeam): although the first Moonbeam DeFi platforms have just been launched with pretty good yield rewards/APYs, the TVL is still low compared to the most well-known DeFi blockchains. We can expect that a huge protocol like Aave or Curve will integrate Moonbeam soon.
- SOL (Solana): despite its success in terms of market cap ranking, Solana blockchain is still in betanet. According to the latest roadmap shared by Solana team, the mainnet could be launched by March 2022... Although it is not confirmed yet, such a bullish news would make SOL rise again.
- XTZ (Tezos): Tezos blockchain is working pretty well for NFTs and DeFi, with a lot of protocols already, but is far away in market cap ranking from its main competitors (e.g., Cardano, who has not even one working DeFi protocol yet). A new NFT platform integrating Tezos would pump it up.
The list of potential good news is not complete: I could also have mentioned AAVE, AVAX, MATIC and SCRT for instance. There is a fierce competition to announce more good news than the other ones and pump the price. However, it is crucial to sort out only the most viable projects, for the long term.
Below a few referral links to help you earn more cryptos...
Disclaimer: it is not a financial advice. Please DYOR.