According to a real currency strategist, bitcoin buyers are to be beware that the crypto carnage could continue.
Bitcoin saw one of its most dramatic recent price swings yet on Friday, plunging as low as $10,400 per coin and prompting Coinbase to briefly disable trading.
While this price action may encourage some to pile in and purchase the cryptocurrency at what appears to be a discount (or “buy the dip”), one foreign exchange strategist has a clear-cut message: Don’t.
Boris Schlossberg, foreign exchange strategist at BK Asset Management, said the volatility could continue over the coming week and he wouldn’t step in here to buy.
Here are his reasons.
– Bitcoin as a speculative product has captivated investors this year. The price swings over the last several trading days have proved particularly volatile.
– Further downside could impact investor sentiment and physical holdings as traders may liquidate their positions and positions in more traditional markets.
– Amid muted volatility in other capital markets, bitcoin could see volatility in the coming days.
– The $10,000 level appears to be the cryptocurrency’s floor, as it marked a breakout just three weeks ago and bitcoin hovered about the level today.
Bottom line: Buying bitcoin here would be like trying to catch a falling knife, according to Schlossberg.