CryptoallertWhat is "buying the dip"?
"Buying the dip" means buying after the price has fallen, hoping it will recover. It sounds logical, but it often doesn’t go to plan.
The idea
When a coin falls sharply in a short time, some traders think the drop is overdone and the price will bounce back a bit. They buy "the dip" and hope to sell at a profit after a recovery.
Why it’s risky
A fall can simply continue. Sometimes there’s bad news, sometimes large holders keep selling. What looks like a dip can turn out to be the start of a much bigger fall. That’s why many people use a fixed exit when buying dips: selling at a set profit, or at a set loss (stop-loss).
Practise with fake money first
In Cryptoallert’s paper trading you can try buying dips without real money. Create an alert rule for drops, for example "falls 3% within 5 minutes". The fixed-rules decider then buys after every drop with simulated money, at real prices and including fees, and sells according to its own exit rules for drops (by default at +2%, at -3% or after 15 minutes). After a few weeks you see whether it actually works, or not.
Frequently asked questions
Does buying the dip always work?
No. There’s no guarantee a price recovers after a fall. You can also lose.
Does practising in paper trading cost money?
No, you trade with simulated money. Paper trading is included in every plan and in the free trial week.
Is this investment advice?
No. This page explains a concept. Cryptoallert gives no advice to buy or sell.
Not investment advice. Information about Bitvavo, Kraken and Coinbase is based on their own help pages (November 2026); their apps may have changed since.