Crypto 'Buy the Dip' Moments to Last Longer This Cycle, Says Hedge Fund Founder

The broader crypto market has experienced a significant decline over the past 24 hours, with a total market capitalization drop of 5.41% to $3.44 trillion, according to CoinMarketCap data. However, experts are cautioning that this may be an opportunity for traders to "buy the dip" and potentially reap rewards in the long run.

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Intra-Month Volatility Expected, But ‘Buy the Dip’ Scenario May Persist

Syncracy Capital co-founder Daniel Cheung recently stated that intra-month volatility is likely to continue, but the pullbacks may be a "buy the dip" scenario for much longer than everyone expects. In a Dec. 9 post on X, Cheung emphasized that traders have shifted to a short-term trading mentality, constantly looking to take profits.

Trading Psychology and Market Sentiment

Cheung’s observation is reflected in the current market sentiment, where traders are piling into leveraged longs before the market corrects. As soon as spot market liquidity melts away, these traders are left with significant losses. The recent market correction has led to a substantial increase in liquidations, with about $1.58 billion in long positions being liquidated over the past 24 hours, according to CoinGlass data.

Why Timing Markets is Extremely Difficult

Cheung pointed out that timing markets is extremely difficult and often leads to incorrect conclusions. In prior cycles, participants largely engaged in a "hodl and buy the dip" mentality, which has contributed to the market’s current volatility. The reality is that timing markets are challenging, and the fact that many people believe they can call the "top" on crypto now suggests that the market may be due for a much longer uptrend than expected.

Near-Term Price Dips May Not Be as Deep

Bitfinex analysts have recently stated that near-term Bitcoin price dips are likely to be less abrupt than last week’s 10% plunge. The decrease in realized profit and sell-side pressure suggests that future declines may not be as severe. This sentiment is echoed by Cheung, who believes that the current market correction may provide an opportunity for traders to "buy the dip" and potentially reap rewards.

‘Buy the Dip’ Opportunity May Persist

While the current market correction is significant, experts are cautioning that it may not be as deep as expected. The "buy the dip" scenario may persist for longer than anticipated, providing traders with an opportunity to accumulate assets at discounted prices. As Cheung noted, timing markets is extremely difficult, and the current market sentiment suggests that the crypto market may be due for a much longer uptrend.

Expect a Swift Rebound?

Crypto analysis firm Santiment recently highlighted that several altcoins with significant gains since October have plummeted today. Among the top 100 cryptocurrencies, the biggest 24-hour losers were Kaia (KAIA), down 31.3%; Stellar (XLM), with a 28.3% drop; and Flare (FLR), which fell 26.9%. Santiment warned that if retail traders react with fear and offload their crypto too quickly, it could trigger an aggressive recovery.

Expect a Swift Rebound to Assets Like TRX, AVAX, DOT, ICP, POL, FIL, and TIA

Santiment’s warning is echoed by Swyftx lead analyst Pav Hundal, who stated that the broader crypto market pullback "looks like a blip." Hundal emphasized that traders were piling into leveraged longs before the smash, which has left them in trouble. Leveraged longs have gone through the market equivalent of an extinction event over the last 24 hours.

Conclusion

The current market correction is significant, but experts are cautioning that it may not be as deep as expected. The "buy the dip" scenario may persist for longer than anticipated, providing traders with an opportunity to accumulate assets at discounted prices. Timing markets is extremely difficult, and the current market sentiment suggests that the crypto market may be due for a much longer uptrend.

Disclaimer

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.