Bitcoin has rallied considerably since the beginning of 2024, a welcome change from the losses of 2022 and the stagnation of 2023. This is excellent news ahead of the April halving that is set to bring prices even higher, somewhere in the $100K to $150K region. It shows that the market remains sturdy even after the previous years were troublesome and that there’s a chance the BTC environment might actually become more mature and reliable.
Investors remain interested in digital gold, with most of those entering the crypto world as newcomers looking to buy Bitcoin. However, no growth remains unchecked in the crypto environment, as that would create unsustainability. These returns to lower price levels are known as “corrections.”
Right after Bitcoin reached new all-time highs, investors began discussing the possibility of a price correction. This isn’t surprising or a sign of market pessimism. It is a simple fact of the crypto market that anytime there’s a significant price upswing, a downtrend will follow to cool down the prices and provide some respite. And while some investors see the corrections as a negative thing, others have a different perspective. According to this perspective, the correction offers investors a fantastic opportunity for portfolio growth and can even be regarded as an integral part of price consolidation.
The fact that there were almost immediate rebounds after the corrections as well is also noteworthy. In the past, anytime there was a drop in the price point, it would usually take longer for Bitcoin to regain its strength. Altcoins were in a similar situation, often being even more badly affected than digital gold. This isn’t the case this time around, as BTC appears sturdy enough to make the climb back to the previous level much easier and faster than before.
Part of the reason why that happens is because the market optimism is much more considerable right now. The launch of ETFs and the upcoming halving have energized the marketplace, providing an incentive for investors to put their back into their transactions and secure their portfolios, something that creates higher engagement levels in the ecosystem.
Buying the dip is the situation in which an investor makes a purchase after the price of an asset has dropped. This is a common strategy in the crypto space. You should always buy when the levels go down and aim to sell when they climb back up. The reason is very simple: that’s the way you make a profit. Moreover, when the price eventually rebounds, and it always does when it comes to crypto, there’s the opportunity to record even more gains. However, like all trading strategies, buying the dips is not a way to guarantee profits.
Just because the value is lower doesn’t necessarily mean the value is better by default. However, no strategy is flawless, and there’s a risk associated with any path you take. The corrections that appear in the marketplace during this bullish run are a good opportunity for investors who want to buy at a lower price. However, they need to be quick, as rebounds tend to occur quite quickly. As of March 18th, the price went back to $67K.
The cryptocurrency world is defined by its penchant for innovation and novelty, meaning there’s a lot of FOMO involved as well. As Bitcoin is moving so suddenly, many investors were left dealing with the effects of the dreaded fear of missing out, as the movements are becoming more unpredictable and challenging to predict. It’s no surprise that the trading community is wondering where the coins can go next, as the halving has not yet arrived. Having a better understanding of the market movements also allows investors to come up with a more consistent plan for their long-term trading that has their interests at the forefront.
Analysts believe that, at the moment, anything above the $69K level is the FOMO stage for Bitcoin. As such, investors must be wary of becoming entrapped in the fear of missing out and making it the centerpiece of their trading strategy. This can be easier said than done, as investors frequently find themselves dealing with considerable pressure. It can be complicated to know how to act and which step to take next if you don’t see the direction in which the market is headed.
But veteran crypto investors are familiar with this type of risk, and know that the best policy is to remain attentive and prepared. Newcomers must also slow down and take all the factors into account to avoid losses.
After consistent growths over the past few weeks, Bitcoin had a difficult weekend on the 16th and 17th of March, going back to some of the lowest levels recorded in over ten days. It climbed back up again soon after, then reached a new period of fresh losses. This price rollercoaster is a challenge for investors, but they must navigate it in order to protect their holdings. According to recent data, Bitcoin’s RSI figures were at 48.2, a little lower than the preferred level, which should be somewhere above 50.
Although institutional trading was not strong during this timeframe, selling pressure remained intense. Some see the current price trend as being entirely in line with the historical pre-halving retraces that have also occurred in the past. Nonetheless, some investors are not convinced that historical movements hold much relevance for 2024. Now, the market is fueled by the exchange-traded funds as well, a completely new asset class that has never existed in the crypto space before.
Reaching a new all-time high ahead of the halving is not a standard part of Bitcoin’s behavior either. Therefore, reaching the next all-time high might occur faster than during the previous cycles. That means investors will be moving through uncharted territory. And while that can be exciting for some, others are more likely to feel stressed about the very serious prospect of losses.
However, there’s some precedent as well, with researchers saying that downswings are common approximately fourteen to twenty-eight days ahead of the miner reward slashing.
If you’re an investor, make sure your strategy is solid and cohesive but allows plenty of room for changes. Crypto is flexible and changes a lot, so you must be prepared to change with it.
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