Best crypto to buy in the dip: how 3 on-chain clues reveal hidden rebounds

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The crypto market is known for its ups and downs. While price drops, often called “dips,” can make some investors nervous, others see them as a golden opportunity to buy promising cryptocurrencies at a lower price. The strategy of “buying the dip” is popular, but the big question is always: which is the best crypto to buy in the dip, and how can you tell if a coin is likely to bounce back strongly?

Instead of just guessing, some savvy investors look for deeper insights using “on-chain clues.” This means looking at data directly from the blockchain – the public ledger that records all crypto transactions. These clues can sometimes reveal “hidden rebounds” before they happen. This article will explore three important on-chain clues that can help you spot potential opportunities in the May 2025 market.

While on-chain data analysis is particularly relevant for tokens already trading on exchanges, understanding the fundamental strengths of new projects like Dawgz AI ($DAGZ), an Artificial Intelligence (AI) focused token currently in its presale phase, is also key for those looking for early-stage investments that might later show strong on-chain signals of growth and potential.

On-chain clue 1: watching exchange flows

One of the most valuable on-chain clues investors watch, is the movement of tokens to and from cryptocurrency exchanges.

Here’s how it works in simple terms:

Exchange Outflows (Moving Coins Off Exchanges): When a large amount of a cryptocurrency is moved from exchange wallets to private, non-custodial wallets, it’s often seen as a bullish sign, especially during a dip. Why? Because investors typically move coins off exchanges if they plan to hold them for the long term. They are taking custody of their assets, which suggests they believe the price will eventually go up and they don’t intend to sell in the immediate future.
Exchange Inflows (Moving Coins Onto Exchanges): Conversely, if a large amount of a crypto token is moved onto exchange wallets, it can sometimes be a bearish signal. This is because tokens are usually sent to exchanges when someone intends to sell them.

On-chain clue 2: monitoring whale activity

Another on-chain clue that can help reveal hidden rebound potential for a crypto to buy in the dip is “whale activity.” Their buying and selling decisions can sometimes influence the market because of the sheer size of their transactions.

Here’s what to look for:

Whale Accumulation During Dips: If on-chain data shows that known whale wallets are consistently buying more of a specific crypto while its price is dipping, it can be a strong bullish signal. These large investors often have access to deep research and may be seeing the dip as a prime opportunity to buy an asset they believe is undervalued for the long term. Their accumulation can absorb some of the selling pressure and lay the groundwork for a price recovery.
Whale Distribution (Selling): On the other hand, if whales are seen moving large amounts of a token to exchanges or actively selling during a dip, it could indicate that they expect the price to fall further or that they are reducing their exposure.

On-chain clue 3: analyzing active addresses

The third on-chain clue that can be very revealing is the health and growth of the network, even when the price is down. Two key metrics here are the number of “active addresses” and the overall “network growth”.

Here’s why these are important, especially during a price dip in May 2025:

Resilient Active Addresses: The number of unique wallet addresses that are actively sending or receiving a particular cryptocurrency on a daily or weekly basis is a good measure of genuine user activity and engagement with the platform. If a crypto’s price is dipping, but the number of active addresses remains stable or, even better, continues to grow, it’s a very positive sign.
Continued Network Growth (New Wallets): Similarly, if new wallets are consistently being created to hold a particular crypto, even during a market downturn, it shows that the project is still attracting new users and investors. This expansion of the user base is crucial for long term success and can help fuel a recovery when overall market sentiment improves.

Applying the clues in crypto projects

It’s true that for tokens actively trading on public exchanges, certain on-chain clues have often been watched by analysts as potential indicators of hidden rebounds. For instance, with established meme coins like PEPE or SHIB, periods of whale accumulation, a noticeable increase in active wallets interacting with the token, or a dwindling supply on exchanges have helped with price recoveries after a dip. These on-chain metrics can suggest growing conviction among holders and reduced selling pressure.

On the other hand there is a new AI-project currently in pre-sale- Dawgz AI ($DAGZ), these specific live on-chain trading metrics like exchange flows are not yet applicable.

However, early “off-chain” indicators can offer analogous insights into building momentum and community strength. Consistent growth in its presale fundraising, which surpassed $3.5 million, increasing sign-ups for its community, and growing traction for its “Dawgz Army” online can be viewed as positive early signals of engagement.

(More information about the project long-term vision you may find in this video about the project)

These aspects, combined with its SolidProof security audit and clearly stated plans for AI–driven utility, are the types of foundational factors early investors often assess when looking for new crypto projects that might show strong growth potential once they enter the broader market and begin generating more detailed on-chain data.

Conclusion: Use on-chain insights for smarter investing

“Buying the dip” can be a smart strategy for investors looking to find the best crypto to buy at a potentially lower price, but it’s crucial to do it with good information. Looking at on-chain clues like exchange flows, whale activity, and network growth can provide valuable insights that go beyond just looking at the price chart. These clues can help you spot potential hidden rebounds in the May 2025 crypto market.

Remember, these on-chain signals are powerful tools, but they should always be used as part of a broader research strategy that includes understanding the project’s fundamentals, its team, its technology, and the overall market conditions. Managing risk is also key when buying dips, as there’s no guarantee a price will rebound. For those interested in exploring new projects with innovative approaches, like Dawgz AI and its focus on AI within the meme space, a good place to start your own research is by visiting their official website (link here)

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