“Buy the Dip” is a popular strategy in investing.
But, what does it really mean and how can you do it successfully?
At Material Bitcoin, we’re more than just a provider of secure cold storage wallets, we’re also a trusted resource for everything crypto and crypto security.
In this guide, we’ll explore the Buy the Dip strategy, how it works, and the best cryptos to invest in.
What Does “Buy the Dip” Mean?
“Buying the Dip” means purchasing an asset, once its price has dropped.
The idea is that it will rebound over time, providing you with larger gains.
Buying the Dip refers to taking advantage of price declines in crypto that you believe have strong long-term potential.
This practice is commonly done in the traditional stock market when corrections and crashes occur.
In the crypto market, Buying the Dip crypto is becoming just as popular because of the market’s volatility.
Take the prices of Bitcoin as an example over the past year.
You will notice an impressive drop and rise over the past 12 months, indicating that BTC is:
1️⃣A good investment for the long-term.
2️⃣Historically has recovered, and even grown, indicating whoever purchased Bitcoin in a dip is now in the green.
The phrase “Buy the Dip” gained massive popularity, especially on social media investing communities when investors flooded Reddit platforms and Twitter (now X).
The “Buy the Dip meme” became a code for the crypto world and meme stock traders.
Certain meme coins like Dogecoin and Shiba Inu saw huge swings, making the dip a pop culture phenomenon and serious investing strategy.
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Why Do Investors Buy the Dip? And Does It Really Work?
The strategy itself is pretty simple: Buy low with expectations that the market will rebound.
Stronger crypto assets like Bitcoin and Ethereum are good examples of how you can benefit from the Buy the Dip strategy as these two have boomed in price.
But as recent market volatility shows, Bitcoin and Ethereum both have had significant drops and while others are panic selling, the Buying the Dip strategy indicates that the time to buy Bitcoin is NOW.
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Historically, Buying the Dip has worked.
One of the best-known examples is from 2020 when Bitcoin crashed due to the global pandemic.
But, by the end of the year, it had rebounded by 483.5%, growing from a low of $4,970.79 in March 2020 to $28,993 by Dec. 31, 2020.
This was a major gain for anyone who bought during the dip.
Bitcoin Rebound 2020
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Remember that while this strategy can pay off, timing the market is challenging and requires careful analysis.
Secure Assets Bought on the Dip
Buying the Dip is only part of a smart investing strategy.
Keeping your crypto safe is the real key to holding crypto.
After purchasing crypto at a lower price, storing it on an exchange or online wallet leaves you vulnerable to hacks, and custodial risks.
Material Bitcoin provides secure, physical cold storage wallets that are specially made to protect your Bitcoin, Ethereum, or USDT offline.
With no electronic components and made from AISI 304L steel, it’s virtually unhackable and durable for a lifetime.
Buy the Dip vs. Dollar Cost Averaging
There are many different strategies for investing in crypto, but two of the most popular are Dollar Cost Averaging (DCA) and Buying the Dip.
Both are structured to help reduce the risk and improve long-term gains, but their approach is totally contradictory.
DCA VS. Buy the Dip: Which Is Better?
Why Buying the Dip Can Outperform DCA
Dollar Cost Averaging (DCA) is a slow and steady way of investing.
But Buying the Dip indicated waiting for a big drop before being able to take action.
With many things in life, “good things come to those who wait“.
Let’s look at this simple example:
How to Buy the Dip: A Step-by-Step Strategy
1: Identify Market Conditions
This might be the most difficult step of all as it requires knowledge of the market’s history.
- Begin by looking for significant price drops, typically 10% – 20% or more.
- There are helpful tools you can use such as TradingView.
2: Choose the Best Crypto Assets
- Focus on well-known coins: Bitcoin, and Ethereum.
- Avoid pump-and-dump schemes by sticking to assets with real use cases and a strong market presence.
3: Set Entry Points & Manage Risk
- Decide on a price point that you are happy to enter.
- Protect yourself with stop-loss orders and don’t invest more than you can afford to lose.
- Once you buy, make sure to store your crypto securely in a cold wallet like Material Bitcoin to keep it safe from hacks.
4: Buy & Watch the Market
- Only use trusted platforms to buy Bitcoin.
- You can set limit orders to automate buying when your target price hits.
- Continue to monitor the market for your next opportunity.
The Best Cryptos to Buy on the Dip in 2025
Buying the Dip works best when you focus on strong, well-known assets. This is because they are already established globally and are more likely to recover and grow over time.
What is your favorite crypto coin for 2025?
byu/xarokk inCryptoCurrency
Here are some of the best cryptos to watch for dip-buying opportunities in 2025 from some of the top influencers and experts:
Best Cryptos to Buy the Dip
Bitcoin (BTC): The most trusted and established cryptocurrency.
Ethereum (ETH): The leading smart contract blockchain, with continued growth in its Layer 2 scaling solutions and staking rewards. It’s the leader in DeFi and NFTs.
Solana (SOL): Known for its high-speed and low-cost transactions, Solana is Ethereum’s direct competitor.
Avalanche (AVAX): Another strong competitor in the Layer 1 space with growing institutional partnerships and projects in DeFi, gaming, and tokenization.
XRP (XRP): Created by Ripple Labs, it’s one of the largest and most well-known digital assets, often ranked within the top 10 by market cap.
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The Risks of Buying the Dip And How to Avoid Them
1️⃣Avoid buying too early
2️⃣Watch out for bear traps: Don’t fall for quick rebounds that turn into deeper drops.
3️⃣Use technical analysis tools: Check indicators like RSI, support/resistance levels, and trend confirmation.
4️⃣Avoid over-leveraging: Only invest what you can afford to lose; don’t borrow to Buy the Dip.
5️⃣Secure your assets in cold storage: After buying, move all crypto to Material Bitcoin to protect against exchange hacks.
Common Mistakes When Buying the Dip
- Not researching assets properly (chasing hype).
- Buying without a strategy (no set entry/exit).
- Over-investing on one dip instead of waiting for confirmation.
Buy the Dip Memes: When It Goes Wrong
Investing large amounts in non-established crypto can lead to major losses.
A recent example of a Buy the Dip meme coin pump-and-dump is the Hawk Tuah (HAWK) token, launched in December 2024 and inspired by the viral “Hawk Tuah Girl” meme.
The coin gained massive attention on social media and quickly jumped in value.
However, the price of HAWK collapsed quickly, creating accusations of a pump-and-dump scheme.
This is a clear example of MANY others about the risks of meme coins, especially when based on viral figures.
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Should You Buy the Dip in 2025?
Buying the Dip can provide you with huge returns if timed correctly.
The start of this year, along with currenct regulatory changes and adoption globally, there seems to be a unique opportunity for crypto unlike ever before.
Just remember, after buying, make sure to secure your crypto in a cold long-term wallet and stay updated with our blog for the latest updates and tips.
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