Bitcoin’s price has fluctuated incredibly in the past 15 months. From the price of Bitcoin skyrocketing from $750 to $20k in 2017, to the nearly 40% drop in four days, this kind of volatility has been unprecedented. With such interesting patterns and fluctuations, many wonder when is the right time to buy Bitcoin?
What has attracted many investors to Bitcoin and cryptocurrencies in general, is the day-trading aspect of the market. With such volatile fluctuations, it’s no wonder many people see explosive profit opportunities. The nature of the market encourages this “Wolf of Wallstreet”, playboy behavior, such as the commonplace of buying a Lamborghini when your investment hits the moon. But real investors aren’t coming into the market for a pump and dump. These investors are holding on to their investments for years. Almost all these expert investors know from experience that slow and steady wins the race. So, if you’re looking to buy you should keep in mind that this isn’t a simple game where you can easily buy low and sell high, but that instead to truly succeed is to HODL through the high’s and the lows.
Many investors will tell you that the best time to buy is not as the price is rising, much less when it has reached an ATH, but instead, they will tell you to invest during a dip, aka BTFD. This is harder than it seems because usually dips are caused by FUD created in the media and can be rather hard to handle. It may be hard not to be influenced by articles in the news that cause uncertainty in the future of Bitcoin. Even if you buy during a dip, the price could still drop even further, and you may find yourself with 20%-30% drop in your initial investment in as little as 24 hours. You must remain calm during these times, for these are the times that test those who can handle the volatility of the cryptocurrency market. Of course, some investors can predict the bottom during a dip, but this takes hours of research and understanding of how markets fluctuate.
So, when are good times to buy the dip? Well, what the crypto world has seen the past couple of years is a consistent pattern correlating to the times of year. For the past 3 years, Bitcoin has had very similar market patterns. Every year has begun with a crash early in the first quarter, then a slight climb and subsequent drop in between the 2nd and 3rd quarter, and finally explosive growth near the end of the 4th quarter. Currently, as of February of 2018, we are experiencing an incredible drop in Bitcoin hitting $6k, a price it hasn’t seen since November of 2017. Some investors are saying this is the perfect time to buy, claiming that Bitcoin will never hit this price again, while others believe that the bubble has popped and that this is the end of Bitcoin as we know it.
The best thing to do is your own in-depth research into Bitcoin and the cryptocurrency world. Read daily articles relating to Bitcoin and its progress as a currency, keeping an eye out for improvements in speed, fees, adoptability, and scalability. These are the main concerns surrounding Bitcoin that become more and more serious as more users begin to acquire the token. When doing research, don’t shield your eyes from the negative news, and stay alert any hiccups in the process, for these can be great indicators for dips and spikes.
Finally, go with your gut feeling. Understand that the market reacts organically. Understand that nothing keeps on rising without some sort of resistance, and that huge price increase isn’t necessarily a good thing for Bitcoin. If you’re going to invest, invest with a purpose, remain calm during dips, don’t fall for the FUD or the FOMO, and most importantly keep HODL.