A "bucket" is a slang name for a limit buy order that a trader places well below the current market price. The idea is to prepare an order in advance that can be filled during a sudden and sharp collapse in quotes. Figuratively speaking, the order is "set out" like a bucket into which, at the moment of a strong drop, the desired amount of coins should "drip" at a favorable price.
This tactic relies on the heightened volatility of the cryptocurrency market, where the price can briefly plunge due to mass sell-offs, position liquidations, or panic, and then recover. The trader does not watch the chart constantly: the limit order is filled automatically if the market reaches the specified level.
Features of the "bucket" tactic
- The order is placed in advance and works without the owner taking part.
- The goal is to buy the asset during a deep but short-lived dip.
- The order may remain unfilled if the price does not reach the set level.
The approach does not guarantee a profit: the market may not fall to the required mark or may continue falling after the order is filled. That is why this strategy is used deliberately, taking into account the risks and overall capital management.
