Bitcoin price plummeted to the lowest value of $21,033.82 today, sparking fears about a further dip to $20k and below. Though the coin has since picked up and is pegged at a price of $22,640 at the time of writing, investors are still concerned about whether to buy Bitcoin or not, considering its future movements.
The entire crypto market is currently facing a dip caused by a mass sell-off in cryptocrrencies that led to the disappearance of over $200 billion from the market in a single day. Fears of an impending recession have suffocated the market, with the price of the two most important and decisive cryptocurrencies dropping – BTC and ETH.
Considering past instances of Bitcoin volatility, experts and experienced investors are seeing this downturn as a chance to make strategic purchases and diversify their portfolios. Bitcoin’s dip is more likely a short-term slump than a long-term bear market, making this the right time to buy Bitcoin.
Will the Current Crypto Dip Continue in the Long Term?
Simply put, no it will not.
Following the stock and crypto market crashes earlier this month, Bitcoin is now trading in a tight range. The crypto market has become increasingly tied to the stock market in recent months, making it even more reliant on global economic variables.
Stock markets have plunged in the aftermath of the coronavirus outbreak, amidst fears about rising prices and a bleak global economic outlook. This is the connected reason why investors are abandoning cryptocurrencies.
They are also concerned about geopolitical tensions and governments’ tightening monetary policies, especially the Federal Reserve of the United States.
These are all short-term causes and impacts, however, given Bitcoin’s history of volatility. Bitcoin’s price is just as likely to fall as it is to rise again, possibly even reach a new high in a few months as is customary with the coin.
While experienced investors are unable to provide an exact date or amount, they are confident that Bitcoin will surpass the $100,000 level due to a long-term increase in its value driven by organic market activity.
This is due to the fact that huge corporations such as Nike and other well-known brands are fast entering the metaverse, prompting bullish experts to re-evaluate the crypto market as a whole.
The emergence of metaverse and NFTs is attracting more investors and profits, which will lead to a market reversal sooner rather than later.
Is This the Right Time to Buy Bitcoin?
If history is any guide, the current Bitcoin slump, or crash, as some call it, could rebound like it did last year, making the present dip an appealing entry point for investors considering Bitcoin as part of their portfolio.
Bitcoin, the first cryptocurrency to debut on the market, is not only one of the most valuable digital assets, but it also has a global investment community. Now would be an excellent time to purchase Bitcoin, lest it achieve a new high in the near future, as is typical of its violent swings.
The crypto dip exposes a long-standing fact about Bitcoin: it is still a very volatile and speculative asset. Indeed, after reaching a new high in mid-April, Bitcoin soon dropped more than half of its value, falling to below $30,000 by mid-July 2021. Similarly, only a few weeks after hitting a new high in November, Bitcoin plummeted below $35,000.
As a result, experts recommend that you keep your crypto investments to less than 5% of your overall portfolio.
Don’t let a quick price increase influence your long-term investment strategy, just as you shouldn’t let a Bitcoin price drop influence your decision to buy crypto.
Make sure you have all of your financial bases covered, from retirement accounts to emergency savings, before investing any more money in a speculative asset like Bitcoin.
The best thing you can do is ignore crypto crash news like this, regardless of how sensational it seems at the moment. Just like any other long-term investment account, you need to set it and forget it once you have bought the asset at the right time, which is definitely now for Bitcoin.
