# Buy the dip? A backtest of -5% and -10% days on 19 coins

> Does buying crypto after a -5% or -10% day pay? 38 Research Lab scans, 38 backtests and a random-entry check on 19 coins since 2020.

Research · Janorium · Published 2026-10-15  
Web page: https://janorium.com/articles/buy-the-dip-crypto-backtest

There is a bounce, and it is short. On all 19 coins the day after a -5% or -10% day was better than usual, but over the next 30 days the dip was followed by a worse month than usual on most of them — and buying every dip and selling a month later ended above the random median in only 16 of 38 cases.

![Six headline numbers from the scans, the backtests and the random-entry check](https://janorium.com/articles/buy-the-dip-crypto-backtest/scorecard.en.svg 'Two thresholds, 19 coins, six years — every number is from the scans and runs below')

## Setup

- **A dip:** a daily close-to-close drop worse than -5%, or worse than -10%. On BTC that happened on 103 and 13 days
  since 2020, on the other 18 coins on 133–324 and 25–77 days.
- **Coins and data:** the 19 coins of [the golden cross study](https://janorium.com/articles/golden-cross-top-20-crypto-2020-2025) with
  spot history, Binance spot, daily candles, 2020-01-01 → 2026-10-01.
- **Statistics:** 38 Research Lab scans (19 coins × 2 thresholds): the mean return 1, 7 and 30 days after the dip
  against the coin's usual return over the same horizon, with a multiple-testing correction (q-value), a rotation test
  and a split into two halves.
- **Trading:** buy with 99% of the account at the next open after a dip, sell 30 days later, one position at a time;
  0.1% fee and 0.05% slippage per side. Then the platform's null model: 100 runs with the same exits and size, but
  entries on a coin flip at the same rate as the rule.

## The bounce is real — and over in days

![For each of 19 coins: the mean 30-day return after a -5% day, after a -10% day and over an ordinary 30 days](https://janorium.com/articles/buy-the-dip-crypto-backtest/events.en.svg 'Over a month, the dots after a dip mostly sit left of the usual 30 days')

The day after a dip was better than an ordinary day on 19 of 19 coins for both thresholds, and that is where every
finding that passed the correction sits: 8 of 114 tests, all on the one-day horizon — BTC after a -10% day, for
example, +4.59% the next day against the usual +0.15%. A week later the dips were still ahead on 15 of 19 coins (-5%)
and 17 of 19 (-10%). Over 30 days the order flipped: a better month than usual followed a -5% day on only 7 of 19 coins
and a -10% day on 6 of 19.

## Trading it

![Total return of buying every -5% or -10% day and selling 30 days later, against holding, for each of 19 coins](https://janorium.com/articles/buy-the-dip-crypto-backtest/backtests.en.svg 'Log scale; buy-the-dip runs against buying once and holding')

Buying every -5% day made money on 10 of 19 coins, every -10% day on 8 of 19. Against simply holding, the -5% rule
came out ahead on 6 of the 14 coins that rose and the -10% rule on 2.

**Backtest: [Buy the dip: after a -5% day, hold 30 days](https://janorium.com/backtests/500)**  
BTCUSDT · 1d · Spot · 2020-01-01 → 2026-10-01

| Return | Max drawdown | Sharpe | Win rate | Trades |
| --- | --- | --- | --- | --- |
| -28.34% | 77.72% | 0.14 | 50.0% | 40 |

*BTC: buy after every -5% day, sell after 30 days — -28.34%*

**Backtest: [Buy the dip: after a -10% day, hold 30 days](https://janorium.com/backtests/519)**  
BTCUSDT · 1d · Spot · 2020-01-01 → 2026-10-01

| Return | Max drawdown | Sharpe | Win rate | Trades |
| --- | --- | --- | --- | --- |
| +124.82% | 36.73% | 0.55 | 66.7% | 12 |

*BTC: buy after every -10% day, sell after 30 days — +124.82%*

## Was the dip the reason?

![For each of 19 coins: the percentile of the two rules among 100 random-entry runs](https://janorium.com/articles/buy-the-dip-crypto-backtest/ranks.en.svg 'Below 50, random entry dates with the same exits did better')

A rule can make money simply by being in a rising market. The null model takes that away: the same 30-day exits and
the same size, with entries on a coin flip. Buying the dip ended below the random median in 22 of 38
rule × coin pairs — the -5% rule was above it on 11 of 19 coins, the -10% rule on 5 of 19 — and in the top 10% in 3,
about the 3.8 that chance alone gives.

![BTC and ETH: the rule's return against the spread of 100 random-entry runs](https://janorium.com/articles/buy-the-dip-crypto-backtest/random.en.svg 'BTC after a -10% day is the one that beat most random dates — on 12 trades')

> **What this test does not show**
>
> - **Two thresholds and one exit, chosen up front.** -5% and -10% with a 30-day hold are round numbers; searching
>   thresholds and holding periods would find something that looks better and is not.
> - **The one-day bounce is not a strategy here.** It is a statistical finding before costs of a daily round trip and
>   with overlapping events — trading it is a separate test.
> - **Spot, 2020–2026, 19 coins.** One market history with one long bull run; 12 trades on BTC is too few to lean on.

## Conclusion

- After a big down day, crypto tended to bounce the next day — on every one of 19 coins.
- The bounce did not last: over a month, the dip was followed by a worse-than-usual 30 days on most coins.
- Buying every dip and holding for a month was close to chance — above the random median in 16 of 38 cases.

More research: [funding as a signal](https://janorium.com/articles/funding-rate-signal-backtest) and
[DCA or lump sum](https://janorium.com/articles/dca-vs-lump-sum-btc-eth-backtest).