#TradeLessons

👉🏻What is a Dip?

In the crypto world, a "dip" simply refers to a temporary decrease in the price of a cryptocurrency after a period of stability or an upward trend.

❓These dips can happen for various reasons, like market corrections, news events, or just the natural volatility of the crypto market.

📈 Spotting the Dip:

Identifying a true "buy the dip" opportunity from a longer-term downtrend can be tricky, but here are a few things to look out for:

1️⃣ Significant Percentage Drop: A dip is usually a noticeable drop, say 5-15% or even more, from a recent high.

2️⃣ Overall Uptrend: It's generally safer to buy the dip when the overall trend of the cryptocurrency is upward. You're looking for a temporary pullback within a bullish market.

3️⃣ Support Levels: Keep an eye on established support levels. A dip that bounces off a known support level could indicate a good buying opportunity.

4️⃣ Technical Indicators: Tools like the Relative Strength Index (RSI) can help identify if an asset is oversold, suggesting a potential bounce back. Look for the RSI to dip below 30.

5️⃣ Volume: Sometimes, a dip with decreasing trading volume can signal that the selling pressure is weakening and a reversal might be near.