Cryptocurrency prices crashed hard on Monday, continuing their recent trend, and leading to substantial liquidations. Bitcoin moved from the year-to-date high of $109,200 in January to below $93,000.
Ethereum price has plunged by over 20% in the last 24 hours to $2,470, while Dogecoin, Sui, Pepe, Hedera Hashgraph, and Chainlink have all tumbled by same amount. Here are the top 3 reasons to buy this dip.
The stock market is also crashing
The first main reason to consider buying the ongoing crypto dip is that the crash is happening across other areas. Global stocks have plunged, with the futures tied to the Dow Jones, Nasdaq 100, and Russell 2000 falling by over 2%. Other global indices like the German DAX, Hang Seng, and CAC 40 fell by over 1%.
American stocks always rebound after going through major corrections. For example, these indices crashed hard in March 2020 when the Covid-19 pandemic started and then bounced back by double digits afterward.
Similarly, these equities plunged after Donald Trump implemented tariffs on Chinese goods in 2018 and then rebounded when he started negotiations. US equities also crashed during the dot com bubble and the Global Housing Crisis.
Keep in mind that Trump evaluates his performance as US president by focusing on the stock market. He often posts about his performance on social media platforms like X and TruthSocial.
Read more: Filecoin price prediction: Will the FIL token recover?
Tariffs as a negotiating factor
Most experts believe that Donald Trump is using the threat of tariffs to negotiate a better deal for the US. They also expect him to change his mind about these tariffs soon because of the economic implications.
The main reason for this is that these huge tariffs will have a major implication on the economy. They will drive inflation higher as companies are forced to adjust prices to cater for the tariffs. That’s because not many companies will move their business to the US because of the high cost of doing business there.
Tariffs will also affect the American economy. Many domestic producers rely on imported raw materials, the costs of which will likely increase this year.
Further, many Americans will avoid making bigger purchases like vehicles when their prices are hiked. Their hope is that they will get a better deal when tariffs end. Therefore, stocks and cryptocurrency prices will likely do well when trade negotiations start.
Bitcoin price has had such big dips before
The other main reason to buy the Bitcoin and other altcoin dip is that this is not the first time that BTC has crashed. In 2024, Bitcoin rose to a record high of near $74,000 in March and then plunged to a low of $49,000 in September. It then rebounded to a record high of near $110,000 this year.
Bitcoin also crashed from near $70,000 in 2021 to a low of $15,000 in 2022 when Celsius, FTX, and Terra collapsed. It then rebounded to a record high this year.
Therefore, while Bitcoin may continue falling for a while, there are signs that it will bounce back later this year. It also has strong demand and supply dynamics, with rising ETF inflows and rising supply.
BTC price chart by TradingView
Further, as shown above, Bitcoin has formed a bullish flag chart pattern on the weekly chart. This pattern comprises a long vertical line and a rectangle chart pattern. It often leads to a strong bullish breakout, with the next point to watch being at $110,000. This view will become invalid if the coin drops below the support at $90,000. These rebounds will push other altcoins like Hedera, Sui, Pepe, and Dogecoin higher.
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