Since the start of 2022, the cryptocurrency market seems to have lost quite a bit of its usual enthusiasm. Prices have fallen significantly, yet, as we are close to entering the 3rd quarter, it’s still hard to decide if the bull market is over and the bear market is the new normal.
Given the recent events and how correlated Bitcoin is with the stock market, it’s rather understandable how the adjustments in the price of cryptocurrencies took place.
As Russia invaded Ukraine, the Federal Reserve said it would raise interest rates at least six times, and there were a lot of changes to U.S. and European Union regulations and many other events. However, once things start cooling down, many analysts believe that the crypto market will take a turn for the better.
With all that in mind, we are still seeing quite a few ups and downs in the crypto market. But when it comes to trading in this kind of situation, it’s impossible to seize all the opportunities in the market. Yet, trading bots can make capturing these dips much easier.
What are the advantages of buying dips?
In a bull market, the trading bots automate members’ trades on their favorite exchanges and capture the best time for people to enter the market. They allow users to choose from multiple pre-designed templates or create their own customized strategies, which they can easily deploy to operate in the market on their behalf.
Buying dips in the bull market is one of the templates that allow users to catch short-term opportunities. Buying the dip in a bullish market and reselling it for a higher price lets people maximize their returns and surf the trend.
How do trading bots make things better?
A good example that will help new and knowledgeable traders is the platform Coinrule, which uses automated trading bots. The platform gives the advantage of entering the market at the appropriate moment.
The tools used by Coinrule allow users to take full control of their crypto trading while fighting back hedge funds with automated bots.
Coinrule offers a broad range of options for traders who are unclear about getting started. The platform also allows members to test their strategy using comprehensive backtesting data and many other strategies.
Right now, when the price drops, it’s difficult to know when the price will rebound; hence RSI is a great tool to determine when a coin is overbought (marking a good exit point/entry for a short position) or oversold (marking a good buying opportunity).
In the following case, the bot buys when the RSI is lower than 35 within 15 minutes and if the MA9 is above MA200, which is an indication that the trend is strong and will rebound:
IF any coin has RSI lower than 35 in a timeframe of 15 minutes and that coin has MA(9) greater than MA(200) in a timeframe of 15 minutes.
To close the strategy with profit, it sells when the rate is back on trend. To understand that the rule checks two things, If the MA9 is greater than MA50 and if the coin’s price is higher than MA9:
Buy 100 USD of that coin with a USDT wallet as a limit order, and then if that coin has MA(9) greater than MA(50) in a timeframe of 15 minutes and that coin has MA(9) lower than the price in a timeframe of 15 minutes then sell 100% of amount bought of that coin to my XX wallet as a limit order.
Even though everybody is holding their breath as there is no known period when the cryptocurrencies will get stable, sometimes buying the dip can be to everyone’s advantage.
The price of this investment opportunity usually goes down over a short or long period of time. By doing this, investors hope to make money from a possible price increase in the future when they plan to sell and get to the top.
But this strategy may add more to the trader’s advantage if they use the automated trading bots to do all the hard work.