Introduction
Bitcoin (BTC) recently recovered after a sharp price drop. Its price fell near $90K before bouncing back by 6.5%. This highlights the risks and rewards of buying dips, especially in bull runs. How much could you gain from buying during the last three dips?
Understanding Liquidation Cascades
On December 6, Bitcoin faced a liquidation cascade during the Asia trading session. A liquidation cascade occurs when many liquidation levels are triggered, forcing large sales. This drove BTC’s price down to nearly $90K before it recovered. Two liquidation cascades occurred recently, creating opportunities for traders. The price first spiked to $104K after clearing $100K liquidity levels. It then dropped to $94K, shaking out overleveraged traders, and setting the stage for steadier price movements.
Liquidation Cascades Create Bitcoin Opportunities
Liquidation cascades cause sharp moves, but they offer chances for traders. Coinglass data showed $883 million in liquidations across the crypto market in 24 hours. Bitcoin made up $493 million, with $418 million coming from short positions.
BTC’s price dropped 12.59% on Binance in just seven hours. It fell from $103.5K to $90.5K. Such drops can feel risky, but they are common in bull runs. During the 2020–2021 run, Bitcoin saw several 20% corrections from its highs. The recent drop was smaller than past ones. Bitcoin has already recovered, reaching $98K at the time of writing. This shows that buying dips during bull markets can be profitable.
Profits from Buying Dips
Bitcoin has seen three major dips since October 29. The latest was the largest, triggered by a liquidation cascade. If a trader bought $1,000 worth of BTC at the bottom of each dip, their $3,000 investment would now be worth about $3,685. This is a 68.5% return in just over a month. Much of these gains came after the U.S. presidential election rally. Timing the exact bottom of a dip is hard, but buying during dips often brings good returns in a bull market.
Lessons from Recent Bitcoin Dips
Bitcoin’s recent action shows that dips can be chances to buy, not just reasons to worry. In bull markets, the trend often supports strong recoveries. Past bull runs prove that Bitcoin recovers well after pullbacks, rewarding buyers during drops. It is nearly impossible to time the exact bottom. Yet, having a clear plan helps investors act when prices fall. In bull runs, dips are often good entry points for confident investors.
Conclusion
BTC’s rise to $100K proves the importance of understanding trends. Liquidation cascades create sharp drops and opportunities. Traders who bought during recent dips gained big rewards. As BTC’s bull run continues, more dips may come. Investors prepared to buy during these moments could see strong gains. Dips can be risky, but they often reward those who act decisively in rising markets.
