All Time Low (ATL)
An All-Time Low (ATL), or a record low is the lowest price yet since a financial instrument was unveiled. All-time lows can be recorded per year, month, per week, or day. For Bitcoin, ATLs usually follow bad news about the coin or waning interest from holders and users.
Characteristics of All-Time Low
All time lows are indicators of a bear market and usually lead to more drops in price. This is because a lot of investors who receive news that Bitcoin is in a new record low usually panic and start selling the coins for fiat, USDT or better-performing coins. Many cryptocurrency traders also watch ATLs closely and use the low price as a leverage to make decisions.
Bitcoin ATLs usually corresponds to an event that triggers large-scale selloffs. Major announcements that impact negatively on Bitcoin’s reputation have had this impact. News about exchange hacks, whale selloffs, government regulation, and forking news are some of the causes of significant price drops.
Buying the Dip
Buying the dip is a slang word for a strategy that takes advantage of low cryptocurrency prices to buy coins for later sales. The strategy takes the advantage of the propensity of the market to overshoot on the upside of the price of Bitcoin, as well as on the downside.
Although buying the dip sounds simple, it does not have the benefit of hindsight, because ATLs do not have signs that there will be even lower price floors in the near future.
It is for this unpredictability that buying the dip is risky. The strategy does not guarantee that someone trading in Bitcoin will make a profit. Prices fall and may take very long before they rally back up.
Bitcoin’s Most Notable All-Time Lows
June 19th, 2011: Bitcoin had a flash crash, falling from USD 16 to less than USD 3 within minutes after the Mt.Gox exchange was hacked.
February 11th, 2012: Bitcoin crashed to USD 4 after Paxum stopped accepting it.
March 1st, 2012: Linode was hacked on this day, with 46,000 BTC being stolen. The price fell to USD 4.89 that day.
December 5th, 2013: China banned banks from accepting Bitcoin, citing money-laundering concerns. The announcement caused BTC to drop in price by more than USD 100.
February 24th, 2014: Mt.Gox, the hacked exchange, was closed indefinitely on February 24th, 2014. That day saw a record low in months, with the price dropping by USD 57.
March 25th, 2014: The IRS declared BTC to be a property and subject to property tax. This led to a fall in the price of Bitcoin by USD 150.
22nd December 2017: Bitcoin lost a third of its value within 24 hours. It dropped to USD 14,000.
24th November 2018: Bitcoin reaches 2018’s all-time low at USD 3,200, while speculators and analysts predict it will go to below USD 3,000 by the end of 2018.
How Bitcoin ATLs Affected the Cryptocurrency Market
Being the leading coin by market capitalization, Bitcoin has had an overwhelming influence on the price of most altcoins and its forks. Whenever the BTC price moves up, most of the other coins in the market follow suit. Whenever the price goes down, the prices of most of the coins except the biggest stable-coins like the USDT also go down.
According to Investopedia, the effects of an ultimate Bitcoin all-time low would be a ripple effect worth USD 250 billion that will wipe out most of the cryptocurrency ecosystem. When Bitcoin surged between 2015 and 2017, other coins surged in concert. The inverse effect has been seen with the steady decline of the BTC price throughout 2018. Price corrections will occur until every cryptocurrency’s utility settles at a stable price when volatility goes to zero.
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