Crypto Prices Are Dropping; Here’s How to Trade Now

The Bitcoin (BTC) “halving” is less than three weeks away. I’ve been writing that the halving is almost always paired with a Bitcoin price retracement. That price pullback might finally be here, but now isn’t the time for panic. In fact, you should regard the downturn as a golden opportunity.

Crypto prices had been on a torrid upward trajectory for several months. Typically, during a Bitcoin bull market, BTC will undergo five or more 30%+ dips on the way to new highs. However, so far in this bull market, we have yet to see a 30%+ pullback. The price pullback we saw last month from $73,000 to about $61,000 was only a 15% dip.

Bitcoin might not get a full 30% price dip before the halving, but since the high of $73,000 set in the second week of March, activity has slowed down. This prolonged stagnation in price action is known by crypto analysts as the re-accumulation zone. Investors who have been sitting on the sidelines or those who have already taken profits are not buying back into the market. They’re taking a wait-and-see approach before the market explodes again.

BTC should find solid support between the $61,000 and $63,000 levels if it drops that far. A true 30% correction would take the price of Bitcoin back down towards the $52,000 level where it would be met with substantial support. At that level, there likely would be plenty of willing buyers.

Don’t confuse what we’re seeing right now with market weakness. This is simply a healthy correction and a break from the up-only price action we’ve seen in Q1 2024.

Each of the last few dips like the one on Tuesday have been met with strong buying volume. There are currently buyers at these lower levels that will prevent BTC from breaking below support.

While altcoins are dropping a bit lower than Bitcoin, that development is par for the course and nothing unusual. Right now, all I see are good buying opportunities to load up and deploy capital before the market absorbs the Bitcoin halving supply shock.

The entire crypto market has been hit by a massive demand shock with Wall Street finally coming around to the idea of crypto. The spot Bitcoin exchange-traded funds (ETFs) changed everything in the minds of mainstream investors.

BlackRock (NYSE: BLK) is already looking to launch a spot Ethereum (ETH) ETF as soon as next month. The amount of capital that has flooded into the spot BTC ETFs has generated massive demand in the Bitcoin market. This ETF “demand shock” started only months before the predetermined Bitcoin halving “supply shock” that occurs every four years. You don’t need a PhD in economics to understand the basic equation:

Demand Shock + Supply Shock = Price Shock

When the market finally prices in the upcoming Bitcoin halving it will supercharge this bull market. Not to mention there still remains a possibility that the Securities and Exchange Commission (SEC) will approve the spot ETH ETF this year. Best of all, retail investors have yet to really come back to the crypto market so far this cycle.

Actions to Take Now

There are still plenty of gains to be made in the months ahead. So, how do we best take advantage of the opportunity?

Well, we start by buying the dips. Not long ago I wrote a guide to buying the dip. In it I showed that simply adding about 10% more capital to each dip can increase your total gains by about 33%. That’s a great strategy if executed correctly. What else should you do?

You should double down on your winners and ride the current trend. Right now the hot sectors are memecoins and projects linked to artificial intelligence (AI). Until that narrative changes, you should prioritize those investments. For most investors who are new to crypto, trading memecoins is a tough market to master. The hot hand changes very frequently, but trading AI coins is a bit easier. Best of all, right now you face excellent entry opportunities.

Take a look at Akash (AKT). AKT is currently down over 30%, the magic number we’ve been seeking. Since its high of about $6.50 on March 11, AKT has come down to a more modest price of about $4.40 today. It also seems to be hitting some support at the moment. This could be a good chance to get in on one of the AI segment leaders before prices start to rise again.

If you look around the crypto market, you’ll find even more good opportunities. That’s the best part about corrections as we’re seeing today. You get the chance to buy quality assets at reduced prices, all before a predetermined supply shock. How could it get any better than that?

Keep your eyes open and stay ready for action. We’re in a bull market after all.

Editor’s Note: The cryptocurrency market is on a tear so far this year. When considering crypto investments, it’s essential to research them thoroughly and understand their underlying technology.

Every portfolio should have some sort of exposure to crypto. But you need to be informed, to make the right choices. The good news is, the experts at Investing Daily have done the homework for you.

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This article previously appeared on Investing Daily.