There's simply no way to sugarcoat things: The crypto market seems to be in free fall, and many top cryptocurrencies are down 40% or more for the year. Even Bitcoin (CRYPTO: BTC), which is often referred to as "digital gold," is down 20% from its all-time high in January.

Understandably, many crypto investors are wondering what to do next. Is this a unique buying opportunity, with many cryptos selling at bargain prices, or is it the last chance to sell before the bottom really falls out of the market? Let's take a closer look.

A "buy the dip" strategy has worked well in the past, so many long-term crypto investors are convinced it will work again. A "buy the dip" strategy is very simple: Anytime a cryptocurrency on your watch list falls by a specific amount (typically anywhere from 10% to 20%), you scoop it up at a bargain price. This strategy works best, of course, if the long-term trend for that investment is upward.

Take Bitcoin, for example. It is infamous for its wild market swings, both to the upside and downside. But over the long haul, the overall trend has been upward, and that has made it a prime "buy the dip" candidate for years.

Consider what happened the last time Bitcoin had a dramatic pullback. In November 2021, Bitcoin was selling for a (then) all-time high of $69,000. Then came a dramatic 65% pullback in price, and by November 2022, Bitcoin was trading for less than $16,000.

Investors who bought Bitcoin at discount prices have been rewarded, however. Bitcoin now trades for $85,000. Yes, it's still trading under $100,000, but it has gained back all of its losses from the market debacle of 2022.

And Bitcoin now has another key factor in its favor: the support of a pro-crypto Trump White House. In just its first two months, the new Trump administration has laid the groundwork for a new plan to make America a "Bitcoin superpower" and the "crypto capital of the world." That includes the establishment of a new Strategic Bitcoin Reserve, and a more favorable regulatory environment for crypto to prosper.

The Bitcoin bears, however, are now out in force. As they see it, Bitcoin's attempts to reclaim the $100,000 price level in 2025 are in vain. The combination of tariffs abroad, weakening economic growth at home, and a massive $36 trillion debt load by the U.S. government is simply too much to overcome, even for Bitcoin.

As a result, there has been a steady flow of money out of Bitcoin, and into safer, less risky assets such as gold. Many top analysts are describing this as a "risk-off" investment mentality. Quite simply, investors are looking to shed as much risk as they can -- including reducing their exposure to the crypto market.

Moreover, those who say you shouldn't be buying the dip have little to no faith in the pro-crypto policies of the Trump White House. As they see it, even a much-vaunted initiative like the Strategic Bitcoin Reserve is nothing but a lot of smoke and mirrors, since it does not actually commit the U.S. government to buying new Bitcoin. For now, it only transfers Bitcoin from other government agencies to the U.S. Treasury for centralized safekeeping.

An important caveat here is that not all cryptocurrencies are worth buying on the dip. For example, consider meme coins. As Cathie Wood of Ark Invest recently pointed out, many of these are going to zero, and could soon be worthless. So there's no way that I'd buy the dip on a meme coin like Dogecoin (CRYPTO: DOGE), which is down 45% in 2025.

It gets trickier when you consider a cryptocurrency such as Ethereum (CRYPTO: ETH), which is down nearly 40% for the year. Historically, Ethereum has been a strong "buy the dip" candidate, because the overall direction of Ethereum's price over the past decade has been upward. But Ethereum is still trading at nearly 60% below its all-time high from November 2021, and has never seemed to recover fully from the crypto winter of 2022. For that reason, I'm leaving it off my list of "buy the dip" candidates.

For now, I'm limiting my list of "buy the dip" candidates to cryptocurrencies that have a $5 billion market cap or higher, are down less than 25% for the year, and recently hit an all-time high in January 2025. That leaves me with just two cryptos: Bitcoin and Solana (CRYPTO: SOL). Both have taken a recent beating due to overall macroeconomic weakness, but both are likely to rebound once the current bout of volatility ends.

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*Stock Advisor returns as of March 24, 2025

Dominic Basulto has positions in Bitcoin, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.

Crypto Market Crash: Should You Buy While Others Are Selling? was originally published by The Motley Fool