An All-Time Low (ATL) is the lowest price of a crypto asset since it was launched. For a coin like Bitcoin, an ATL usually occurs when there is bad news about the coin or when most holders begin to see off their holdings.
All-time lows indicate the beginning of a bear market and usually lead to more drops in price. This is because a lot of investors who learn that Bitcoin is at a new record low usually panic and start selling the coins for fiat, USDT or better-performing coins. However, some cryptocurrency traders also watch ATLs closely and take advantage of the low price to buy the dip.
Major announcements that impact negatively on Bitcoin’s reputation have had an unfavorable impact on Bitcoin’s price. News like exchange hacks, whale selloffs, government regulation, and blockchain forks news are some of the reasons of significant price drops.
Buying the Dip
Buying the dip refers to a trading strategy that takes advantage of low cryptocurrency prices to buy often a large number of coins to sell at a higher price later. Although buying the dip seems easy to do, it does not always guarantee profit as a trading strategy. The ATL of a coin could mark a further depreciation in the price of the asset.
This unpredictability makes buying the dip risky. The strategy does not guarantee that someone trading in Bitcoin will make a profit. Prices fall and may take very long before they rally back up.
How does Bitcoin ATLs Affect the Cryptocurrency Market?
Due to the fact Bitcoin is the leading coin by market capitalization, it has an overwhelming influence on the price of most altcoins and its forks. Hence, whenever the price of BTC moves up, most of the other coins in the market move up. A good example of this was when Bitcoin surged between 2015 and 2017 and recently in 2021, other coins surged in accordance.
Whenever the price went down, the prices of most of the coins except the biggest stablecoins like the USDT also reduced.