All-Time Low (ATL)
If you're eager to invest in crypto, it's worthwhile to pay attention to statistics. Anomalies like an all-time low can provide you with some exciting opportunities. However, before you start making major decisions, you need to understand how all-time lows work. Our guide will explain the basics of this rare event.
What Is All-Time Low?
All-time low, often abbreviated as ATL, means the lowest price of an asset. Identifying the all-time low for a crypto asset can be tricky. Unlike stocks, a crypto's value isn't necessarily set in stone. It can have different values in different denominations, and it can have value outside of its hard cost.
To simplify things, most all-time low calculators will look at the crypto's value in USD. If the USD price is lower than it's ever been, the price is at an all-time low.
The traditional definition of an all-time low looks at the coin's day-by-day price throughout its entire lifespan. Since cryptos often increase in value over time, the first price a token is sold for will often be the lowest that it ever gets.
However, some people may use other time periods to analyze all-time lows. It’s also worth noting when a coin's weekly, monthly or yearly average reaches an all-time low.
What Happens When an Asset Hits an All-Time Low?
When a major crypto has any type of all-time low, it’s a big news event. For example, when Bitcoin hit a yearly all-time low in June 2022, fintech experts discussed and analyzed the situation. This buzz tends to lead to more trading.
When a crypto asset reaches its all-time low, a few different reactions can occur. Many investors will decide they don't want to waste another minute holding onto the risky crypto. Often, people rush to sell during an all-time low, which leads to even further lows. However, many all-time lows end up causing a small jump in a crypto asset's price. Some people see an all-time low as a chance to buy crypto assets at a discount.
Whether the price recovers or not sometimes depends on what caused the all-time low. If some sort of temporary uncertainty or financial downturn were the cause, then prices might recover. However, if the crash were caused by a major blockchain vulnerability or other disaster, then prices might continue to drop.
Buy Low, Sell High
When there's a crypto you feel certain about and the price starts going crazy, it can be a good time to buy it. Experienced traders call this "buying the dip." The whole strategy behind buying the dip is to buy crypto when it drops to a low price and hold onto it until the price recovers. The "buy low, sell high" strategy works well in some cases. Many investors make thousands by taking advantage of all-time lows.
However, don't let a sudden low encourage you to make a poor decision. Before buying the dip, take a breath and let the rest of the coin's tokenomics influence your decision. An all-time low can indicate that something is seriously wrong with the crypto asset. Instead of bouncing back, some coins continue to plummet. If something tells you to leave the coin alone, but you don't, you can end up with a lot of worthless crypto assets that no one wants to take off your hands.
Ultimately, an all-time low can be a promising time to buy crypto. However, you need to do a little research before jumping onto the "buy low, sell high" train. Consider whether this looks like a temporary decline or a major crash. Crypto prices frequently fluctuate, so an all-time low doesn't necessarily predict the coin's future price.