Veteran trader Peter Brandt warns of potential dangers when buying dips
While many bitcoiners believe the ongoing sell-off will provide more opportunities to buy the dip, veteran chartist Peter Brandt did alarm Traders shouldn’t catch a falling knife in a recent tweet.
The legendary commodities trader, who began his career in 1976, says he is extremely careful when adding a losing trade.
To back up his argument, he pointed to the fact that many people were lured into buying cheaper silver in 1980 after the price of the metal peaked and began to fall at $ 50.35 an ounce. Unfortunately for Dip buyers, the price continued to drop to $ 3.65 an ounce. On March 27, 1980, silver plummeted from $ 21.62 to $ 10.8 an ounce.
Bitcoin is currently down 40% from its all-time high, but the leading cryptocurrency has seen much larger price declines in previous bear markets. In 2018, Bitcoin lost more than 70% of its value during an overcast bear market.
Veteran trader Peter Brandt also emphasized, of course, that he does not believe that all market conditions are the same.
However, there was a very clear reason for silver’s decline: Nelson Bunker and William Herbert Hunt, the heirs of American oil tycoon HL Hunt, were forced to sell their vast fortunes after making a lot of money due to the new COMEX limits had invested in the metal in the 1980s.
With Bitcoin, future price developments are extremely unpredictable, but there is general consensus in the market that the cryptocurrency is likely to be affected by rising interest rates in the US.
Former BitMEX CEO Arthur Hayes predicts the crypto market will be crushed by the Fed’s restrictive policies unless inflation concerns take precedence before the November US election. The Fed is expected to end its bond-buying program in March this year, ending the “money printing” story.
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