Tuna Chain is a modular Layer 2 solution that functions on Bitcoin while also integrating with Ethereum. Learn more about how it works in this article.

 is rightfully known for its security through its use of 

 offers greater versatility. Until recently, blockchain projects had to choose between the two. Now, however, a hybrid solution is available that blends the benefits of both of these leading blockchains and takes a bold leap into the future.

 that functions on Bitcoin while also integrating with Ethereum.

) is strongly rooted in elevating the user experience (UX). Bitcoin is the most trusted cryptocurrency, largely due to the recognized strength of its security protocols. However, while it excels in security, it lacks the versatility that ultimately fosters innovation. In this regard, Ethereum is viewed as a superior blockchain. 

Tuna Chain’s modular Layer 2 solution works on Bitcoin through a 

 hybrid layer while offering Ethereum functionality. It uses 

-powered modularity to minimize transaction costs. At the same time, this modularity improves both trust and efficiency. Tuna Chain currently supports Solana, Ethereum and Bitcoin transactions. It works with Bybit, Phantom, MetaMask, UniSat Wallet and OKX Wallet.

Tuna Chain is a new project that was established by three unknown individuals, known under the names of Tuna Nigiri, Tuna Sushi and Tuna Sashimi. Each team member brings their unique experiences and knowledge with blockchain, cryptography and 

 to move Tuna Chain forward. Tuna Chain is financially supported by BSC News, Normie Capital, Serafund, ArkStream Capital, Cogitent Ventures, MH Ventures and other angel investors. After its Ocean Festival and Ocean Trio, Tuna Chain now has over 1.3 million wallets connected on the Tuna Chain Testnet, with a total 

The purpose of Tuna Chain is to bridge the gap between Bitcoin and Ethereum. Although Bitcoin’s chain boasts superlative security, it lacks the versatility that Ethereum’s 

 provides. As a hybrid Layer 2 solution, Tuna Chain’s primary goal is to blend the two. By doing so, its founders want to push the envelope on the future of blockchains and provide a better UX.

Tuna Chain’s functionality is based on three core features: the Toro native 

, Celestia-powered modularity and a hybrid ZK-OP layer. With the Toro stablecoin, users can purchase new digital assets through the overcollateralization of their BTC supply. Meanwhile, Celestia-powered modularity improves data availability, and the ZK-OP hybrid layer executes smart contracts with fast, secure transactions.

Rollup Solutions and Operational Mechanism of Bitcoin Layer 2

Layer 2 solutions similar to those found on Ethereum enhance Bitcoin's scalability, using technologies such as 

 (ZK). Tuna Chain enhances Bitcoin's transaction capacity by integrating optimistic rollup technology into its Layer 2 framework.

Securing Native Assets on Bitcoin: Leveraging Taproot's Upgrade

 upgrade into the Bitcoin network marks a significant advancement in the security of its native assets. This update incorporates advanced cryptographic techniques, such as Schnorr Signatures, MAST and Tapscript. To further secure these assets, Tuna Chain has implemented a multisignature security model and is exploring the addition of external validators to its network security protocols.

Tuna Chain processes transactions through a detailed system that begins with the precise arrangement and execution of transactions. These are then reliably recorded on 

's data availability layer and conclusively verified on the Bitcoin blockchain. Verifiers are essential to the chain's integrity, quickly producing fraudproofs to address any transaction discrepancies and ensure the network remains secure and reliable.

Tuna Chain is a next-level Layer 2 solution that moves blockchain into the future. Each of its core features provides unique benefits to support a superior UX. 

Tuna Chain uses Celestia-powered modularity to optimize its Layer 2 functionality. Specifically, this modularity is supported by Layer 2 data management that enhances trust, improves efficiency and reduces transaction fees.

The ZK-OP Layer is Tuna Chain’s hybrid Layer 2. This layer utilizes a dual-phase architecture that integrates Ethereum’s benefits with those of Bitcoin. By doing so, it empowers smart contracts and accelerates secure transactions.

 is a grand opening event celebrating Tuna Chain’s launch. During this grand opening, the first round of TUN tokens will be distributed. Distribution cap for this initial release is based on 

 growth driven by the community, and could range between 2% and 21%. The token supply increases by 2% as each new milestone is achieved.

, the setup experience for new community members, consists of Calm Waters, Whimsical Tides and Majestic Depths. With Calm Waters, new users can receive 60 points for following Tuna Chain on social media and linking their wallet. Additional points are available by referring friends to Tuna Chain. Whimsical Tides, the testnet phase, is still in development along with Majestic Depths.

In the first quarter of 2024, Tuna Chain successfully completed several milestones, including the launch of the Tuna Testnet — Alpha, Ocean Trio Points campaign, Ocean Festival (which highlights the TVL) and the rollout of the TunaChain Explorer. 

Moving into Q2 2024, progress is ongoing with significant developments. Tuna Chain’s team is currently deploying an optimistic rollup (OP)-based Mainnet, establishing a native bridge from Bitcoin to the Tuna Mainnet, launching a Mainnet decentralized exchange (

), and developing a modular data availability (DA) layer.

Tuna Chain functions with three primary tokens: TORO, TUNA and WOOG. Each serves a different and integral role.

TORO, Tuna Chain’s native stablecoin, helps users transform their BTC into their choice of high-yield digital assets. This is accomplished seamlessly and with full transactional stability. The user doesn’t need to liquidate the BTC to complete the transaction.

 of Tuna Chain, is used for various purposes, such as revenue generation, funding builders and contributors, benefiting token holders, incentivizing users and community members, and promoting community engagement within the Tuna Chain ecosystem.

TUNA has a total token supply of 210,000,000.

 token that acts as the primary ticket into the Tuna Chain ecosystem. Only 200 of 1,000 available WOOG tokens were distributed at the BRC-20 Launchpad event. The remaining WOOG will be distributed only when they’re activated by external forces.

Looking to get your hands on the TUNA token? Bybit will soon offer it via our 

In the meantime, you can also purchase TUNA through 

WOOG tokens grant access to the Tuna Chain ecosystem. Of the total supply of 1,000 tokens, only 200 are currently scheduled to be released. These tokens are exclusively available through the 

. There’s a purchase limit of one WOOG token. While 800 WOOG tokens will remain, they’re sealed, and their release isn’t scheduled. You must have an active Bybit account with a funded wallet to participate in the event. 

TUNA tokens play a fundamental role in governance of the Tuna Chain’s unique hybrid Layer 2 chain, designed to deliver the benefits offered by both Bitcoin and Ethereum. Tuna Chain is presented as the future of blockchain, and is poised to change the blockchain landscape in exciting ways, which could place a premium on TUNA tokens. 

As an investment, TUNA should be purchased conscientiously because the value of the tokens will decrease when additional tokens are released, even for a short period of time. In addition, all cryptocurrencies are speculative in nature, with a risk of partial or complete loss. Therefore, 

 cryptocurrencies before making an investment.

Tuna Chain is a hybrid Layer 2 solution that provides a much-needed service in the blockchain world. By bridging the gap between Bitcoin and Ethereum, it allows users to enjoy the best of both worlds. In doing so, it has the potential to move the dial forward significantly in blockchain technology. Moving forward, Tuna Chain is a platform worthy of attention.

Intermediate

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Tuna Chain (TUNA): Reinventing Bitcoin With a ZK-OP Approach

Notable Ethereum Spot ETF applications have come from high-profile issuers that received approval for Bitcoin Spot ETFs earlier this year. Learn more here.

The cryptocurrency landscape could be on the brink of a major shake-up as several Ethereum spot exchange-traded fund (

) applications await regulatory approval. These financial instruments promise to bridge the gap between traditional investment markets and the fast-growing world of digital assets, offering investors a regulated and accessible means for gaining exposure to 

This article explores the top pending Ethereum Spot ETF applications, exploring their significance, potential impact on the market and implications for the broader adoption of cryptocurrencies.

What Is an Ethereum Spot ETF Application?

An Ethereum Spot ETF application is a filing submitted to regulatory bodies, such as the U.S. Securities and Exchange Commission (SEC), to list an exchange-traded fund that tracks the price of Ether (ETH), allowing investors to gain exposure to the cryptocurrency without directly holding it.

How Does an Ethereum Spot ETF Application Work?

An Ethereum Spot ETF application is a formal request by a financial institution to gain regulatory approval to offer a financial product that tracks the price of Ether (ETH), the second-largest cryptocurrency and the token of the Ethereum network, in real time. 

Investors can participate in the ETF by purchasing shares through their brokerage accounts. This way, they can gain exposure to Ether's price movements without the complexities associated with directly buying or holding the cryptocurrency. The ETF provider assumes responsibility for securely holding the Ether, managing the fund's day-to-day operations and ensuring ongoing compliance with regulatory requirements.

Current Ethereum Spot ETF Application Landscape

, Fidelity, VanEck and ARK 21Shares have all thrown their hats into the ring by submitting applications to the SEC for approval. These particular issuers have previously applied to run Bitcoin Spot ETFs that are currently approved and trading.

However, the SEC has pushed back on the recent Ethereum Spot ETF applications, prolonging the decision-making process. They've also sought public feedback in order to gauge whether the arguments supporting the approval of Bitcoin Spot ETFs are applicable to Ethereum Spot ETFs as well.

Anticipation has continued to build with the approach of the final deadlines for the SEC's decisions, set for between May 23 and Jul 5, 2024 for various applicants. The SEC's review process involves assessing factors such as the potential for market manipulation and the resemblance between Ethereum spot and futures exchange-traded products.

The outcome of these applications holds significant weight, as it could shape the future landscape of cryptocurrency investment vehicles and play an important role in driving broader adoption of Ethereum within traditional financial markets. Investors and observers alike are closely monitoring these developments, recognizing their potential to influence the trajectory of both Ethereum and the wider crypto market.

Top High-Profile Ethereum Spot ETF Applications

Several high-profile financial institutions have applied for Ethereum Spot ETFs, reflecting a growing interest in cryptocurrency investment products. Following is a list of some notable contenders.

BlackRock, a global investment giant and the world’s largest asset manager, submitted its 

 Ethereum Trust, in November 2023. However, the SEC postponed its decision to late January 2024 and again to March. The SEC is currently seeking public comment on the application, particularly concerning Ethereum’s susceptibility to fraud, and has delayed its decision until Jun 11, 2024.

Franklin Templeton, another major player in the investment world, 

 for an Ethereum Spot ETF in February 2024, making it the latest contender to join several other firms in the race. The SEC has delayed the deadline to June 2024 to rule on the firm’s application. If approved, the fund will be listed on the Chicago Board Options Exchange as Franklin Ethereum ETF.

Known for its ETFs and mutual funds, investment management firm VanEck has expressed doubts about the SEC's approval of its Ethereum Spot ETF application, 

 in July 2021. Although the SEC’s decision is expected in May 2024, VanEck’s CEO has voiced his skepticism of approval by the May 23, 2024 deadline, citing the regulators' ominous silence. Notably, VanEck holds the distinction of being the first investment management firm to file an ETH Spot ETF application in the United States.

21Shares specializes in cryptocurrency exchange-traded products (

), while ARK Invest focuses on thematic investing. The two firms 

 for the ARK 21Shares Ethereum ETF in September 2023, with the SEC expected to decide by May 24, 2024. The application has been 

 to include a cash-creation model, and has proposed plans to stake a portion of the ETF’s Ether for generating additional income.

A global asset manager focused on cryptocurrencies, Hashdex 

 with the SEC in September 2023 to list and trade shares of the 

 its decision on the application, with a verdict expected by late May 2024.

Grayscale is the world’s largest digital currency asset manager, with a range of investment products that provides exposure to cryptocurrencies and the digital currency asset class. The firm 

 its Grayscale Ethereum Trust into an Ether Spot ETF in October 2023. The SEC extended the review period, setting a new deadline for June 2024. 

Invesco, an investment management firm, has partnered with Galaxy Digital, a diversified financial services firm, to create a 

 for an Ethereum Spot ETF to be named the Invesco Galaxy Ethereum ETF. The SEC's decision, expected in December 2023, has been 

Fidelity Investments is a major financial services corporation with a global presence and millions of customers. Fidelity first filed for an Ethereum Spot ETF in November 2023. It later 

 its application in March 2024 to include ETH staking, which would allow investors to earn additional income from staking rewards. The SEC has set a deadline of May 23, 2024 to approve or deny the application.

What Could Happen If an Ethereum Spot ETF Application Is Approved?

The approval of an Ethereum Spot ETF application holds significant implications for the cryptocurrency market.

Approval of an Ethereum Spot ETF could mark a significant milestone for the crypto market. It would greatly improve Ethereum's accessibility, bolster market confidence and potentially drive up Ether’s price. In addition, such an approval would represent a new milestone in cryptocurrency adoption, providing investors with a regulated and easy avenue for investing in Ethereum. Nevertheless, regulatory hurdles and market volatility are variables that could influence the timing and magnitude of the approval of the pending applications.

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An Overview of the Top Pending Ethereum Spot ETF Applications

Stripe is reentering the cryptocurrency market by allowing merchants to accept payments in USD Coin (USDC) on Ethereum, Solana, and Polygon networks

The SPX index is down 0.46%, influenced by disappointing economic data indicating a slowdown and persistent inflation, along with poor earnings from companies such as Meta Platforms and IBM. The broader cryptocurrency market is up, with Bitcoin and Ether rising by 1.12% and 1.45%, respectively in the past 24 hours.

Today’s outperformer is W, which jumped 16.1% after Wormhole launches Native Token Transfers for seamless W token interoperability across blockchains.

Wormhole (W), launched in 2020, is a cross-chain protocol that facilitates communication and token transfers across over 30 blockchain networks. Originally a crypto bridge between Solana and Ethereum, it has expanded to include features like the Portal token bridge and messaging protocols, serving as a comprehensive platform for cross-chain interactions. Wormhole has launched Native Token Transfers (NTT) to enable seamless transfers of the W token across blockchains like Solana and Ethereum without needing liquidity pools. This innovation supports Wormhole's introduction of a multichain governance system and W staking, enhancing the token's functionality and security across diverse ecosystems. NTT marks a key step in Wormhole's roadmap, advancing its commitment to interoperability and decentralized, flexible token usage.

Check Out the Latest Prices, Charts, and Data of 

Stripe is reentering the cryptocurrency market by allowing merchants to accept payments in USD Coin (USDC) on Ethereum, Solana, and Polygon networks starting this summer. Originally, Stripe accepted Bitcoin in 2014 but discontinued this option in 2018 due to increasing costs. The new initiative will support USDC transactions that are automatically converted to fiat currency for merchants, aiming to enhance global payment accessibility, particularly for those without traditional banking facilities. This marks Stripe's continued interest in the evolving potential of cryptocurrencies.

Bitcoin's price showed volatility near $64,000, influenced by reduced ETF inflows and a market tug-of-war. U.S. inflows slowed, ending a streak for BlackRock’s iShares Bitcoin Trust. Meanwhile, Morgan Stanley may soon enable direct broker recommendations for Bitcoin ETFs, potentially increasing demand. In contrast to U.S. regulatory hesitations, Hong Kong is launching three spot BTC ETFs. Despite these fluctuations, Fidelity Digital Assets remains optimistic, citing an increase in smaller Bitcoin wallets as a positive indicator of broader adoption.

The Aethir Cloud Drop campaign features an airdrop that is accessible through various activities, including purchasing Aethir Checker nodes, engaging on social media, participating in quizzes, referring friends, and being part of certain NFT/token communities. Eligibility for the airdrop is determined by a badge and quest system. More details are provided on their website and Twitter page.

Beginner

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Stripe Reintroduces Crypto Payments with USDC Support on Multiple Blockchain Networks

Merlin Starter (MSTAR) is an IDO launchpad and accelerator dedicated to supporting Layer 2 projects for Bitcoin native asset applications.

Over the last couple of years, projects aiming to develop the wider Bitcoin (

) crypto ecosystem have been gaining more attention in the crypto industry, taking some focus away from 

-based initiatives. With the arrival of projects such as 

, one might even say that the Bitcoin ecosystem is experiencing a kind of innovative development that characterized Ethereum's heyday between 2015 and 2020.

Among the projects driving this phenomenon are Merlin Chain (MERL) and its integral Merlin Starter (MSTAR). Merlin Chain is a Bitcoin Layer 2 (L2) platform committed to supporting utilization and enhanced liquidity for Bitcoin native assets, while Merlin Starter, a Bitcoin-focused 

 and L2 project accelerator, is a core part of the wider Merlin ecosystem,

 (MSTAR) is an IDO launchpad and Layer 2 accelerator dedicated to supporting promising Bitcoin-focused decentralized projects.

 It's an integral part of the L2 Merlin Chain (MERL), designed to facilitate a seamless flow of Bitcoin native assets across various protocols in the Bitcoin ecosystem. Merlin Starter aims to support projects dedicated to enhancing the circulation and liquidity of Bitcoin native assets, both on Merlin Chain and across a variety of Bitcoin-focused protocols and networks.

Founded in 2023, the Merlin project launched its operations in early 2024, with Merlin Starter's native MSTAR token debuting in mid-April 2024.

Merlin Starter is made up of two main components — an 

 launchpad and a Bitcoin Layer 2 project accelerator. Additionally, the 

 NFT collection is a critical element within the project's ecosystem.

The IDO launchpad on Merlin Starter facilitates the launch of projects dedicated to native asset issuance, enhanced 

 and free asset circulation for the Bitcoin ecosystem. It's the first native launchpad of the Merlin platform. The launchpad also supports new projects that explore cross-chain functionality and focus on enabling Bitcoin native assets across different platforms.

As of late April 2024, the launchpad is still in the early stages of its operation, but already lists a couple of initial projects that it’s helped to launch. The most recent of these is Sparkle (FCFS), a gamified astrology app.

The Merlin Starter launchpad offers a number of different token launch modes, including 

, oversubscription lotteries and allocations based on preset weightings. A variety of token standards are supported, including the highly popular 

 and ERC-20 as well as the less common BRC-420, ERC-404 and Atomicals (ARC-20). Standards supporting cross-chain assets may also be available. 

Merlin Starter’s IDO launchpad also features an insurance protocol that helps protect investors from either 7-day or 14-day loss.

While the Merlin Starter IDO launchpad is dedicated to facilitating the launch of new tokens, its accelerator is an initiative aimed at providing consultancy and support to L2 apps and protocols at the pre-launch stage, as well as in the critical post-launch period.

Via the accelerator, the Merlin Starter team offers multidisciplinary consultancy services in areas such as technical support, marketing strategies and initiatives, human resources and 

Merlin's Spellbook is an NFT collection issued by Merlin Starter. Spellbook NFTs grant holders eligibility for a 20,000,000 MSTAR token airdrop, should they choose to stake the NFT. Staking a Spellbook NFT in exchange for MSTAR locks the NFT, and the NFT is subsequently burned. As an NFT staker, you may also qualify (depending upon random selection) for IDO whitelist entries.

At the center of the wider Merlin ecosystem, Merlin Chain is an L2 platform dedicated to enabling cross-chain applications utilizing Bitcoin native assets. Although it operates as a dedicated Bitcoin L2 network, Merlin Chain also offers 

 (EVM) compatibility in order to better support cross-chain use cases.

 network, which allows it to achieve significant scalability and cost efficiencies. The average block time on the chain is less than one second, while the average transaction fee is measured in tiny fractions of a cent.

Merlin Starter's native crypto, MSTAR, is a recently launched token (April 2024) that’s used for the following functions on the IDO launchpad:

The token's maximum and total supply is 1 billion. Supply allocation shares for MSTAR are shown in the chart below.

You can buy the MSTAR token on Bybit through a Spot pair with USDT (

). Additionally, you can join Bybit's MSTAR campaigns to grab a share of the 

The first campaign, MSTAR Community Airdrop Quest, runs through May 10, 2024, 8AM UTC. It’s offering a total prize pool of 8,900,000 MSTAR, featuring a 7,000,000 MSTAR community airdrop, a 1,000,000 MSTAR referral prize pool and an exclusive affiliate referral event with a 900,000 MSTAR prize pool. The second campaign, Token Splash, is being held through Apr 30, 2024, 9AM UTC, with a 2,800,000 MSTAR prize pool.

As a plethora of projects such as Merlin Starter look to extend Bitcoin's functionality, its blockchain is steadily moving away from a passive state of use that’s reserved for asset transfers and storage. Merlin Starter is contributing a great deal to putting Bitcoin native assets to use in various apps and protocols.

While Merlin Chain is doing the critical job of enabling the actual utilization of assets via its Layer 2 network, Merlin Starter is a pivotal endeavor aimed at supporting numerous new projects looking to make Bitcoin a more active crypto environment. The more of these projects we see, the more likely it is that Bitcoin will develop into a thriving ecosystem that could rival Ethereum’s. To achieve such a goal, Merlin Starter is exactly the catalyst the industry needs.

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Merlin Starter (MSTAR): Empowering Startups and Innovation

Trading

Bitcoin

Buy the Bitcoin dip! A corrective dip helps to unfold opportunities for traders to enter into a position at a lower price. Learn how to catch the wave.

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At some point, you may have heard the phrase, “buy the dip.” After crypto burst onto the popular scene, investment catapulted the price of many crypto coins higher, creating strong uptrends. When this happens, traders may develop FOMO and decide to buy even at high prices. However, 

 allows traders to use any corrective dip in price as an opportunity to buy Bitcoin at a cheaper level.

There are risks involved with buying dips in price, as a small dip may simply be the beginning of a large market crash. Market crashes are nothing new to Bitcoin, which has a history of correcting more than 75% — rendering “buy the dip” as a debatable strategy. Is buying the dip the best strategy for you? Let’s explore this topic further to find out.

“Buying the dip” is another way to say that you’re purchasing a financial asset after it’s fallen in value. While the asset is falling, it’s said to be in a “dip” where prices are lower than the previous high. When the market has been in a longer-term sustained uptrend, this dip in price presents an opportunity to buy more shares or coins at a discount. This way, if the market returns to new highs, you’ll have more shares or coins, which enhances your future gains.


Buying the dip is a universal trading strategy for most financial assets in the stock market or crypto market. But it’s an especially popular strategy for trading Bitcoin because crypto trends tend to be unusually long and strong. As a result, it’s challenging for traders to catch the opportunities, which results in traders buying at higher prices. Therefore, waiting for a corrective dip to unfold provides traders an opportunity to enter into the position at a cheaper price and accumulate more coins than if they bought them at a higher cost.

Dip buying can appear in any financial market — stocks, commodities, futures, forex and crypto. However, buying the dip in crypto can be different from employing the strategy within other financial markets.

Typically, the trends in the crypto market are stronger and the volatility is substantial. Therefore, when a corrective dip unfolds, the correction in crypto can be more significant than in other financial markets.


Take Bitcoin in 2021, for example. Bitcoin started the year by doubling in value. As the price continued to ascend, corrective dips were relatively shallow, between 18% to 31%. However, when Bitcoin’s price reached $64k, a larger crash began to unfold in the summer of 2021 which resulted in a 55% correction.

This is the biggest challenge in buying the dip with crypto. You may buy on a 20% corrective dip, only to find the crypto market eventually crashing over 50%. A long-term investor (HODLer) believes that buying the dip simply allows them to garner more coins while crypto is still early in its adoption stage. Their rationale is that if the price increases dramatically, their stash of coins could produce life-changing wealth.

There are many reasons why prices dip for Bitcoin that range from political instability, regulatory measures, and community influence. For example, the changes in the global economy are driving investment away from Bitcoin. The global pandemic of 2020 slowed commerce down, grinding businesses and economic activity to a halt. Due to citizens having doubts about their future employment, they pulled back investments in anticipation of lower pricing.

In addition, the news cycle may create short-term dips. In 2021, 

, making it illegal for them to do business there. As a result, a majority of Bitcoin nodes shut down or had to move their operations somewhere else, making the Bitcoin network less secure as there were fewer nodes to verify transactions.

Sometimes, an asset is simply overbought and needs to consolidate its previous gains. There are technical indicators traders can apply to price charts to determine if a 

 is about to unfold. One popular technical tool to use indicates bearish divergence.


Going into the April 2021 high, Bitcoin was exhibiting technical price divergence. Higher price highs kept forming, while the 

 (RSI) indicator was displaying lower highs. Especially after a long uptrend, this RSI divergence implies that a potential price correction may unfold. A trader buying the dip who spots this signal can choose to wait for a cheaper price before buying more coins.

Most of these reasons are explained away by Bitcoin enthusiasts as FUD, a crypto slang acronym for fear, uncertainty and doubt. Many people still don’t believe investing in cryptocurrencies is wise, since there aren’t time-tested cash flows or proven ways to value crypto networks. This results in FUD, causing investors to question their investments — and to consider selling their Bitcoin.

, the strategy of buying the dip can be utilized. A few altcoins that are large enough and within the top 20 by 

 could be candidates for buying the dip. This is because there are enough buyers and sellers to balance each other out so that the larger price trends appear on the chart.

Unfortunately, for altcoins with a smaller 

, buying the dip could be disastrous. Smaller altcoins are much riskier and more susceptible to fraud or compliance risk, making their prices extremely volatile. As a result, a small altcoin’s price might crash and never recover — so that investors need to be careful not to allocate too many funds toward them.

Catch a Falling Knife vs. Buy the Dip: Differences

The evil cousin to “Buy the Dip” is “Catch a Falling Knife.” The falling knife analogy is used by traders to suggest that the market is crashing, and may not rebound anytime soon. Suppose that a knife is dropped from an all-time high above. If you were to stick your hand out and try to catch it, you might get cut up pretty badly. There’s a chance you could catch the knife without hurting your hand, but are you willing to take the risk? 

This is how it is when markets are crashing. Traders might see lower prices and decide to buy in anticipation of a rebound. However, that rebound might not come for several months — or even years. Traders involved in the 2018 crash are familiar with this phenomenon, as the bear markets lasted for 11 months and collapsed 85%.

The big difference between catching a falling knife and buying the dip is that dips tend to be relatively small and contained within the context of the larger uptrend. Retracements of 20–40% are normal in crypto.

On the other hand, a falling knife is more like a crash or a collapse, where the vast majority of the price is retraced swiftly and deeply.

Buying the dip is really about market timing, with two common strategies. The first involves adding support trend lines to the charts, and the second is using an oscillator, such as RSI, to help identify turning points.

Let’s start with trend lines. When the market is in a strong uptrend, look for common swing lows, and connect them with a trend line. Extend this trend line to the right, and it should be below the current market price.

Then, as a corrective dip unfolds, look to buy when the price reaches the support trend line, while targeting new highs. This process can be repeated — again and again — as the market frequently dips, even within a strong uptrend.

In the image above, a support trend line can be drawn for Bitcoin from January to April 2021. There were multiple occasions where Bitcoin’s price dipped to the trend line, offering an opportunity to buy.

The trend line won’t hold up forever. When it breaks, that’s a clue that a larger correction, and even a possible crash, may be unfolding.


Another common strategy for buying the dip involves waiting for oversold oscillators on the intraday chart. When Bitcoin is in a strong uptrend on the daily chart, scroll down to a 4-hour chart and add an oscillator, like the RSI.

The RSI indicator is versatile to help traders identify when an asset has become oversold. Its signals can alert you that the dip may be coming to an end, offering an opportunity to buy.

In the Bitcoin chart above, there are several instances when the RSI is signaling oversold conditions, meaning a rally is about to begin. A trader could use those signals to buy while targeting new highs.

The challenge with using a tool like RSI is that if Bitcoin were to crash, the oversold conditions would be a buy signal — even though the market is collapsing. Therefore, RSI works best when conditions are believed to be sustaining the uptrend.

“Buying the dip” itself is just a catchphrase. Traders need to turn the phrase into a strategy that’s similar to what we’ve outlined above. Therefore, to successfully buy the dip, you need to use 

 to time the market. There are many other oscillators and indicators to use for this purpose.

Aside from the strategies discussed above, Bitcoin must be in a strong uptrend. The strength of the uptrend is what allows the price to recover from the brief dip. If the uptrend is lacking strength, then the strategy becomes riskier as the uptrend struggles to bail you out.

Worse yet, if Bitcoin is in a downtrend, then buying the dip won’t work because you’ll get caught in bull traps, leading to losing trades.

 means buying a predetermined amount of an asset at predefined timing intervals. An example would be buying $500 of Bitcoin on the first Friday of each month.

The main difference between dollar-cost averaging (DCA) and buying the dip is that DCA is predefined, irrespective of the price of Bitcoin. On the other hand, buying the dip is fully dependent on the price of Bitcoin, and requires the trader to correctly time their entries into new bull rallies.

Therefore, when deciding whether to DCA or buy the dip, consider your skill levels in technical analysis and timing bullish reversals. DCA doesn’t require any special skills — just a calendar to plan your buys. Buying the dip, however, does require the trader to understand technical analysis and be able to implement it with high accuracy.

If you feel you need more practice on timing entries, then consider DCA, which is designed for newer traders.

There are several risks a trader faces when they decide to buy the Bitcoin dip.

Most of the risk is associated with analytical errors. There are certain market conditions in which buying the dip tends to be more successful. If the trader misdiagnoses market conditions, then they’re going to be more susceptible to losses.

Additionally, buying the dip requires a rules-based strategy so that the trader knows when to enter the position. If the trader doesn’t have rules underlying their strategy — or doesn’t follow their own rules — then the likelihood of loss looms larger.

Lastly, the volatility of crypto makes it difficult to determine if, for example, Bitcoin is simply going through a small dip, or if it’s the beginning of a larger crash in prices. If it’s the latter, then buying too early in the crash will expose the trader to a significantly large loss. Over the past decade, it hasn’t been unusual for Bitcoin to correct more than 75% of its price.

Buying the dip is a popular catchphrase used by investors who intend to hold on to dear life with their assets, and typically in a long run. By itself, buying the dip isn’t a strategy for making money, which is why traders will want to create their own rules for buying and selling on minor dips in pricing.

In other words, buying the dip can be a successful tactic if the trader considers current market conditions. Otherwise, they might get caught at the beginning of a market crash, which will create losses in their trading account. As with any other trading strategy, buying the dip is best attempted with both market awareness and experience in technical analysis in your toolbox.

Buy the Dip: Should You Buy the Bitcoin Dip?

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards