Market Dip Buying

Definition ∞ Market dip buying is an investment tactic where individuals or institutions purchase digital assets after a significant price decline, expecting a subsequent recovery. This strategy operates on the premise that the price drop is temporary and the asset retains its underlying value. It aims to acquire assets at a reduced cost to maximize potential gains when the market rebounds. Successful dip buying requires conviction and capital.
Context ∞ News reports frequently discuss market dip buying during cryptocurrency corrections or bear markets, often analyzing whether investor sentiment supports a recovery. The extent of dip buying activity can serve as an indicator of market confidence and the strength of a potential price floor. Analysts often look for specific technical patterns or on-chain metrics to confirm if a dip presents a genuine buying opportunity.