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Bitcoin price: Should you buy the dip in Bitcoin and other cryptos?

Bitcoin price: Should you buy the dip in Bitcoin and other cryptos?
Written by publisher team

New Delhi: The pre-Christmas sell-off in the cryptocurrency markets has alarmed investors, reducing risk appetite. The cryptocurrency market is the latest to fall victim to selling pressure, as investors risk losing their positions.

Major cryptocurrencies, including giants such as Bitcoin and Ethereum, have lost as much as a fifth of their value on the back of profit bookings and concerns that have caused nearly $1 billion in cryptocurrency sales.

Raj A Kapoor, founder of the India Blockchain Alliance, said the sudden sell-off of bitcoin and other cryptocurrencies comes on the heels of some serious declines in the US stock market.

He added, “There has been a lot of talk that the widely expected ‘tapping’ from the Federal Reserve could trigger the Bitcoin and crypto bubble.

However, the digital token package has seen a rapid recovery in the past few hours, with many coins making up most of the losses, while a few recorded slight gains from lower levels.

Market experts point out that this is a good time to buy digital tokens for local investors, but one must stick to quality and make long-term investments.

According to Coinmarketcap data, Bitcoin bottomed at $4,2874.62 on Saturday, before hovering around $49,000 on Sunday 10.30 IST. Similarly, Ethereum tested the $3,500 levels before crossing the $4,100 mark again.

Hitesh Malviya, founder of itsblockchain.com, said that from a market point of view alone, the coverage-related news has had a major impact on risky assets like bitcoin, which controls entire markets with great correlation.

“The fact that the markets recovered more quickly from the recent correction cannot be ignored,” he added. It took six months to recover when we hit the epidemic and less than two months after the second wave.”

Bitcoin and smaller cryptocurrencies are still very volatile compared to traditional markets, with the likes of Ethereum, BNB from Binance, Solana, Cardano, and XRP oUen from Ripple all rebounding multiples in a matter of hours.

Among the gainers, Terra, Helium, Decentraland, Onus Seed Liu are up between 9-22 percent in the past 24 hours. Tether and the dollar, which is pegged to the dollar, maintained some marginal gains, providing some relief to investors.

Medium and long-term investors should view it as a great opportunity to start accumulating small amounts, suggested Kapoor, who advises investors to allocate 5 percent of their portfolio to cryptocurrencies.

“For those who invest in cryptocurrencies for the long term using a buy and hold strategy, volatility like this is expected,” he said.

In the metaverse space, Kapoor chose SAND and MANA as his good investment bets, while Energy Web Token and Powerledger are his picks from the energy sector. Among the DApps and Defi spaces, he chose Ethereum, Avalanche, Solana, Uniswap, and Terra.

Conversely, EOS, Theta, Internet Computer, Dash, Waves, Nexo, Filecoin, Harmony, Qtum and 1inch Network were among the biggest losers on Sunday, each posting 15%. All of these tokens scored double-digit cuts.

Despite the sell-off, investors turned to cryptocurrencies at lower prices. Despite a 4 percent drop in the market capitalization of digital tokens, cryptocurrency trading volume has risen by nearly 45 percent and exceeds $200 billion.

Malviya, which is outperforming Bitcoin, Ethereum, Polygon and Terra, warned that if cases of the Omicron variant rise in countries such as India and the United States, the Bitcoin and cryptocurrency market could correct further.


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