The cryptocurrency market has been in freefall after a cascade of liquidations and insolvencies across major hedge funds, lenders, and even some exchanges. Users’ funds have been frozen, and companies are now filing for Chapter 11 bankruptcy.
The result of the carnage has taken cryptocurrency prices back to 2017, creating an incredible opportunity to buy the dip and take advantage of the deep discounts. After such a strong selloff, fear could prevent investors from getting back into crypto, causing them to miss out on any future upside in the nascent asset class.
To help ease your fear, we’ve put together five compelling reasons to take the chance and buy the dip in crypto using the award-winning margin trading platform PrimeXBT.
A Quick Recap Of The Crypto Contagion Crash
As a quick recap of what has shaken up the crypto market, the story begins with the US Federal Reserve announcing it would start hiking interest rates to combat inflation. Bitcoin price sank, Ethereum sold off, and altcoins across the board began to correct.
With prices plummeting, the positions of hedge funds were put at risk along with retail investors. The problem was worsened when an algorithmically backed stablecoin lost its peg, liquidating associated BTC and LUNA reserves in the process. Crypto prices tanked, and LUNA fell to zero.
Contagion then began to spread, forcing lenders to liquidate the positions of hedge funds, retail investors, and more. With asset prices now lower than when they were lent out, many companies have become insolvent and were forced to freeze user withdrawals or file for bankruptcy.
Five Reasons To Buy The Dip In Crypto
But much like one man’s trash is another man’s treasure, this disastrous situation for crypto holders could also be an equally incredible opportunity. To help frame why this could be a chance of a lifetime, here are five reasons to buy the dip in crypto with PrimeXBT.
Risk Has Been Flushed Out Of The System
The cryptocurrency market is a risky asset class compared to stocks, commodities, or forex currencies, for example. Forex currencies move only a percentage point in either direction, and stocks keep intraday moves inside ten percent or less even on the most volatile days. Crypto can crash 20% in a single day.
The asset class doesn’t need added risk from unnecessary altcoin projects, poorly designed algorithms that back billions of dollars, or Ponzi scheme-like lending services that take customer money and lend it out to hedge funds. While risk will always remain, the asset class is a lot less risky now than it was just months ago.
Bitcoin Is The Most Oversold In Its History
Although a speculative asset like Bitcoin can stay in oversold or overbought territories for extended periods, the top cryptocurrency by market cap has never in its history before been this oversold according to the Relative Strength Index.
Past bear market bottoms coincided with such oversold conditions, but a new bull market began only after the RSI was able to return above a reading of 30. It very well could be time to buy the dip if these conditions are met.
What Goes Up Must Come Down, And Vice Versa
In investing, there is a phenomenon called mean reversion. The idea suggests that after prices rally for an extended phase, prices should correct and return to the mean average. The same concept works in reverse, with any substantial corrections eventually returning to the mean average.
With Bitcoin having already collapsed as much as 74% from all-time highs set in 2021, there is now an increased probability of a rally than previously.
It’s Early In Crypto… All Over Again
For the most part, everyone who considered crypto throughout the last two years had wished they had bought into the emerging asset class a lot sooner. Bitcoin appreciated from $4,000 to $68,000 in under two years. Even those investors who purchased BTC during the previous bull market peak in 2017 at $20,000 would have made a 3x on their money if they held long enough.
With Bitcoin back to just above $20,000 and Ethereum at around $1,400, these assets are trading at prices from more than four years ago. Even though it was already early in crypto, the selloff set prices back so far; it’s now even earlier all over again.
Trade With Full Flexibility AT PrimeXBT
PrimeXBT lets users buy the dip in crypto using their VISA or Mastercard, then use the digital assets to fund one of many profit-generating accounts. In addition to margin trading, there are the Covesting copy trading module and high-APY yield accounts that connect directly to DeFi protocols.
Using leveraged long and short positions, traders can get into a position in crypto now without waiting. When the next phase of the trend becomes clear, traders can go long with the recovery or short the next significant wave down. With proper risk management, there is less risk than going all in on holding crypto, and it eliminates the risk associated with missing out should a crypto recovery move quickly.
Summary: Why Buy The Dip With PrimeXBT?
PrimeXBT offers access to all of the most popular cryptocurrencies on the same platform as stock indices, forex currencies, and commodities like oil and gold. Users can buy cryptocurrencies using the browser-based platform experience or through the free mobile app for Android and iOS devices.
With powerful trading tools around every turn and a way to access one’s portfolio from anywhere in the world, if you are considering buying the dip in crypto, do so with PrimeXBT.