Original Author: Cyclop (@nobrainflip)
Translation: Asher (@Asher0210)_
Editor's Note: You often see examples of people making big money during market FOMO phases, but true wealth (I mean those 100x opportunities) is accumulated during market correction periods. People often say "buy the dip" (even Eric Trump, Trump's second son), but rarely delve into how to truly seize the opportunity, specifically how low to buy and how much. This guide aims to help you find the "best entry point" during a pullback.
Currently, I believe the market is roughly in the "anger/frustration" phase, and it is at such times that many people become millionaires.
Many people are now hearing the call to "buy the dip," but few truly explain what this means or how to operate.
First, what does "buy the dip" really mean?
"Buy the dip" means purchasing at the temporary lowest price of an asset, or even at the absolute lowest price. But the problem is that no one can accurately predict the lowest price. Nevertheless, by adopting the right strategy, you can get close to this lowest point, thereby optimizing investment opportunities.
Now, let's break down the specific steps of "buying the dip," which can be divided into three parts:
- "When to buy": Market cycles are divided into two phases: the buying phase and the correction phase. In the buying phase, our goal is to build positions, while in the correction phase, we sell to take profits. The buying phase typically lasts about 14 months, filled with corrections and consolidations, while the correction phase is a rapid rise phase, lasting about 4 months, marking the market peak;
"What to buy": This depends on your risk/reward ratio, investment amount, and ability to withstand pressure. If you are a long-term investor, BTC, ETH, and SOL are sufficient, but if you want higher returns, you need to look for undervalued altcoins. Although many no longer believe in "altcoin season," we will still see altcoin seasons in popular sectors. This time, not all altcoins will rise indiscriminately; instead, you need to choose projects that are in the price discovery phase and align with new narratives;
"How to buy": Many people think buying is simple, as if it can be completed with just one click. However, this is why people often miss true buying opportunities. In reality, buying is far more complex than it seems, and the key is to lower the average purchase cost. The most effective method is to use dollar-cost averaging (DCA), which means buying in batches rather than investing all funds at once. For example, if you plan to invest $10,000 in BTC, you can divide the funds into four parts and buy whenever BTC drops by 5-7%: invest $4,000 the first time, and $2,000 for the second to fourth times. This way, you can optimize your buying price amid market fluctuations, rather than being affected by short-term volatility from a single purchase.
Additionally, a common mistake many make during this correction period is to invest all their funds into the market without keeping enough stablecoins. Therefore, it is recommended to keep 30-50% of your portfolio in stablecoins, which not only reduces the volatility of your portfolio but also provides you with operational space during market corrections. If you no longer have stablecoins, don’t just sit idly by; you can earn extra funds by finding a Web3 job. During this correction period, you have every opportunity to earn at least $10,000, especially since there are many job opportunities in the Web3 industry right now.
If you decide not to operate for a while, then improving your skills during the market's cool-off period is also a good choice. This time can be used to study the market, discover new narratives and new projects, all of which will be key for you to stand out in the next cycle.
In summary, while market corrections may seem unfavorable, it is precisely this period that provides you with the opportunity to build positions. With the growing popularity of the crypto market, the potential for the future is enormous. Therefore, stay focused, work hard, and use this cycle to become a millionaire.
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