“Buying the Dip” Phenomenon Investors When Crypto Falls

Bittime – The crypto market is volatile. Many coins experience price drops. However, the phenomenon of "buying the dip" by crypto investors and institutions appears when market conditions are not good. 

The “Buying the Dip” trend is rife

According to a report from FalconX there is a clear trend that institutional investors buy crypto assets when prices are falling. This trend is also referred to as “buying the dip”. 

The price drop that occurred last week, which wiped around $230 billion from the market, was actually a moment for them to collect crypto assets.

FalconX recorded a significant increase in interest in Bitcoin, even three times higher than Ethereum.

The firm also reported that almost all types of investors, including trading desks, hedge funds, venture funds and retail aggregators, acted as net buyers on Tuesday, as prices began to recover.

Read Also: The downward trend in Bitcoin prices is similar to the trend before the 2016 bull market

Unstable Global Market

This sharp decline occurred amidst unstable global market conditions. The stock market experienced a major correction, with the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indexes recording their biggest declines since September 2022.

This was caused by disappointing US labor market data and fears of a recession.

Bitcoin Price Recovers

Despite market pressure, Bitcoin managed to recover 13% of its lowest point. David Lawant, head of research at FalconX, stated that institutional investors see falling prices as an opportunity to add to their positions.

Lawant also explained that the buy-sell ratio among institutional investors had fallen below 50% in the previous week, indicating there were more sellers than buyers. However, this situation changed drastically after the price reduction, with much higher purchasing figures.

Overall, the actions of these institutional investors provide a positive signal for the crypto market. While market conditions remain challenging, strong interest from large investors could help stabilize prices and drive future growth.

The Impact of Purchases by Institutional Investors on the Crypto Market

Buying action by institutional investors when crypto prices are falling is a positive signal for the market. This shows their confidence in the long-term prospects of digital assets.

1. Market Stability

One of the direct impacts of purchases by institutional investors is increased market stability. Institutional investors generally have large amounts of money, so their purchases can help dampen price volatility.

2. Increased Liquidity

When institutional investors enter the market, liquidity tends to increase. This means there are more funds available to buy and sell crypto assets, which can help prevent extreme price fluctuations.

3. Mass Adoption

The active participation of institutional investors can drive wider crypto adoption. Their presence can increase the confidence of retail investors, because they are seen as validation of digital assets.

4. Potential for long-term price increases

While there are no guarantees, purchases by institutional investors could be a catalyst for crypto price increases in the long term. The more institutions that enter the market, the greater the potential for price growth.

Read Also: Bitcoin cs Drops, This is the Right Time to Buy Crypto according to the Crypto Academy

Conclusion

Even though there is a positive impact in "buying the dip" by investors when market conditions are down, it is important to remember that the crypto market still faces various challenges, such as unclear regulations and high volatility.

Therefore, it is important to conduct in-depth research before making an investment decision.

How to Buy Crypto on Bittime

You can buy and sell crypto assets easily and safely via Bittime. Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti. 

To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. Apart from that, also ensure you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application. Study Complete Guide How to Buy Crypto on Bittime. 

Monitor graphic movement of Bitcoin (BTC) price, Ethereum (ETH), Solana (SOL), and other cryptos to find out today's crypto market trends in real-time on Bittime.