How does the "Buy the dip" strategy work?

The "Buy the dip" strategy is a popular approach in financial markets that is actively used in cryptocurrency trading as well. The main idea is to purchase assets when their price temporarily decreases, and then sell when the price recovers or rises. This method requires a good understanding of the market and patience, as it is important not only to precisely determine the right moment to buy, but also to minimize risks associated with potentially prolonged periods of price declines. In cryptocurrency, the strategy can be particularly profitable but also risky due to the high price volatility.