Should You Buy The Ethereum Dip?

Ethereum's performance over the past three months has been quite discouraging for holders. According to Binance, the altcoin slumped more than 7% falling below $2,3000. At the same time, the coin is now down more than 35% from the start of the year. 

While these losses are less than satisfying for investors, they also offer a chance for novice traders interested in buying crypto to evaluate their financial plan and get into the volatile asset class if it's financially reasonable for them.

If a pair of sneakers goes on sale and you like it, you should buy them. That's pretty much the same with crypto assets. If you've done your research and decided that crypto is right for you, it's a good time to jump into the investment. 

How do you know if crypto is right for you? 

To be frank, you shouldn't rush to buy a coin just because it is relatively cheap, financial advisors say. 

If investing in crypto doesn't suit your long-term financial plans, you should stay away from the market. If your financial goals extend to at least ten years, now is the right time to buy it. Otherwise, you should take a more holistic approach to the crypto asset instead of venturing into an unpredictable market. 

The deeper you get into trading, the riskier you can expect your investment to get. With any cryptocurrency, not just ETH, the price and a number of other key metrics can help you make more educated decisions about what has high investment potential and what's more likely to plummet. Besides common quantitative factors such as price, trading volume, and market cap, you should also consider the more quantitative factors like use cases, who created the coin, and more. That said, you should have a clear goal for buying Ethereum instead of being lured in only because the price dropped.

Is "Buy the Dip" a Good Strategy? 

This strategy follows the fundamental investment principle of "buy low, sell high," but with a little more targeted approach. There are two conditions for buying the dip: a substantial drop in prices and a clear indication that they will rise again. Through this strategy, investors hope to exploit dips by purchasing at a relative discount and reaping the fruits when prices rise again. 

In an unpredictable crypto market, buying cryptocurrencies at any price – let alone an extremely tempting dip - is risky. How so? There's a good chance for prices to return to the previous level, but also riskier if they fall even further, leaving your investment underwater. 

Just by interpreting a coin's performance in the past, you could determine whether it will bounce back as it did last year or rise up again. For example, prices for Bitcoin have shown a degree of seasonality to date, indicating a fall in value in the spring before bouncing back in early summer. But, as with every kind of investment, let alone the volatility of the crypto market, past performances are no guarantee of future results. 

At the same time, trading experts believe that current dips are great entry levels for investors to start building a diversified portfolio in cryptocurrencies. What's more, they even recommend buying the dip from hereon as the long-term fundamentals of some popular digital coins like Ethereum, Bitcoin, Cardano, etc., are still fairly strong. 

Our guess is that you should start Bitcoin and Ethereum, as they are the most popular and mainstream cryptos. 

How to Buy Ethereum

While Bitcoin tops the current market with the value of its circulation, Ethereum doesn’t cease to amaze. With a market cap of over $232 billion, ETH is the second-largest digital currency and has support from a number of big-name companies like Google, Amazon, Facebook, and Samsung. 

There are a number of ways to buy ETH. You can either purchase it directly from another trader over the web or try to locate an ATM for digital currencies near you. However, you may find that it is easier to purchase ether through an exchange platform like Binance. Here's how to get started in just 4 steps: 

1. Determine your level of risk 

Buying cryptocurrencies can be a gamble. Why? As with all forms of investment, digital currencies are especially vulnerable to price changes. 

Although the second most important digital currency has had impressive returns in the past, it's also had some sizable crashes, sometimes in surprisingly short amounts of time. 

For this reason, you should consider the risk potential along with the stability and diversity of your investment portfolio before you check up on that Ethereum price. Pro traders will all tell you the same thing: never invest more in crypto than you can afford to lose. 

2. Sign up for a Binance account 

Before buying a digital currency through Binance or any other reputable crypto exchange, you have to sign up for an account. 

You can deposit money directly from a bank account, complete wire transfers or use your deposit money from PayPal. 

3. Buy Ethereum 

Unlike stock buying, where you're limited by market hours and certain holidays, the crypto market is a whole other story. Digital currencies like ETH work very differently: they are decentralized currencies (with no man in the middle to YES the transactions) which mean you can buy and sell them around the clock. "

To buy ether, click on its ticker symbol – ETH- in the Binance's "buy" menu and add the amount you want to buy. 

4. Store your Ethereum 

Once you purchase your currency, you have to store it in your digital wallet. While Binance will store it for you, some people choose to store their investments themselves to avoid any potential of losing their crypto. Here's more on how crypto wallets work. 

With more than 116 billion coins in investors' hands, Ethereum makes a good investment choice if you know what you're doing. But before buying a volatile currency like ETH, you will want to ensure you've done your research and your finances are in good shape. 

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