Bitcoin just suffered a 40% price crash while global markets were shaken at their core by the Coronavirus pandemic. Chief market analyst Naeem Aslam and veteran trader Charlie Burton told Cointelegraph what sense they make of this bloodbath and their strategies to survive it.
Why did Bitcoin fall with the rest of the markets?
Naeem Aslam explained the Bitcoin plunge as a direct consequence of the equity market crumbling amidst Coronavirus-driven panic and what it means for investors:
“They have no other option but to liquidate some of their positions in other assets such as Bitcoin [...] In order to save themselves from margin calls in traditional assets.”
Charlie shared a similar view:
“When everyone is losing on their equity portfolios, then they end up selling what they've been doing well on to offset some of their losses.”
Have we touched the bottom?
Both analysts are optimistic regarding Bitcoin’s performance in the months ahead. Naeem predicts that central banks’ monetary policies around the globe are going to experience enormous stress and that is when the fundamentals of Bitcoin are going to be put to the test.
Burton sees the positive side of the Bitcoin crash, since it serves to shake out weak ends and favors medium-to-long term perspectives.
Still, both analysts are convinced that deeper lows may still be ahead.
“Could it come back down, revisit $3000? Yes, it could. But I still see in a year, 18 months’ time — that's where I see it gradually trickle its way back up,” Aslam said.
How to handle the market crash?
The two market experts also shared their personal strategies on how to profit the most from these turbulent times. Naeem believes day traders should take advantage of huge volatility to get involved in the market. For long-term investors, he suggests being patient and waiting.
Charlie Burton warns about the risk of volatility and the importance of risk management:
“Risk a maximum of 1 percent per trade. Reduce your position size and have wider stops than you'd normally have.”
For more detailed insights on how to handle the crypto market turmoil, make sure you check the full video on Cointelegraph’s Youtube channel!