The fall in prices is also an opportunity to buy cheap again.
In the last couple of days, there has been a sharp drop in the price of Bitcoin, dipping below the $22,000 mark for the first time in several weeks. In general, the course of Bitcoin is pointing down for the next few days and weeks.
So far in February, the Bitcoin price has been unable to continue the January rally. In the first days of the year, the rise of Bitcoin stopped. Once the Bitcoin price tried to break the $24,000 mark, then the price fell back to $23,000.
In recent days a price drop began. Bitcoin price first fell below the $22,500 mark. A sharp drop to $21,800 then followed, before leveling off again. The trend continues to point slightly lower towards $21,500.
Rising prices in the cryptocurrency market are always exciting for investors as they can make real-time profits on their cryptocurrencies. This can happen very quickly in the crypto market. However, falling prices often cause stress and disappointment. The fall in prices is also an opportunity to buy cheap again.
If the price of Bitcoin has fallen sharply, investors can buy back the cryptocurrency for cheaper and further benefit from future price increases. Therefore, a bear market always offers great opportunities.
The Bitcoin price crash may benefit those who risk betting on it. Two methods to achieve this are described below.
Buy After a Bitcoin Crash (Riskier)
If you had invested in Bitcoin after the FTX crash, you would have made around 30% profit, even after the crash of the last few days. At that time, the price of Bitcoin fell to almost $15,000. A reversal could be worthwhile, once the meltdown has died down a bit, and the price turns slightly sideways again.
The risk of this strategy is that it is difficult to predict when a clash will end. Theoretically, the price of Bitcoin could have fallen as low as $10,000 by November 2022.
Dollar Cost Averaging (DCA)
Dollar Cost Averaging refers to a strategy where you invest in Bitcoin or other cryptocurrencies at a predetermined time within a certain interval (monthly, weekly, etc.).
With the Dollar Cost Averaging (DCA) investment strategy, the aim is to minimize the impact that the volatility of shares or participations could have on the purchase at the time of entering the stock market. In other words, investing under the Dollar Cost Averaging strategy consists of dividing the amount you want to invest into equal portions, and making purchases of assets in bear markets at regular time intervals to obtain long-term profits.
The advantage of this strategy is that you invest on average and, therefore, profit from falling prices. However, this strategy cushions the risk, since you invest again, even if the prices continue to fall. Many long-term investors use this strategy.
By Audy Castaneda
