What Is Catching a Falling Knife? Understand the Risks Before Buying the Dip in Crypto

“Catching a falling knife” refers to the risky act of buying an asset during a sharp price drop, hoping to catch the bottom before it rebounds. In the crypto market, this behavior is especially dangerous due to high volatility. Many investors are tempted to buy when prices crash, thinking it’s a bargain. However, without proper analysis, this move often leads to immediate losses if prices continue to fall. The term is metaphorical—like trying to catch a real falling knife, you could hurt yourself if you get the timing wrong. This article explains what catching a falling knife means, why it’s risky, and safer strategies you can use instead. Learn how to protect your capital and avoid impulsive decisions during market downturns.