Cryptocurrencies collapsed Wednesday, with bitcoin plunging as much as 30% in a single session amid regulatory pressures overseas and negative headlines on the home front.
In an interview with CNBC’s “Trading Nation,” New Street Advisors Group founder and CEO Delano Saporu said that “for investors that are thinking long term, this is actually a great opportunity to buy at prices you may not see for a while.”
He looked back on the history of bitcoin, citing its last major correction in 2017. Though the dip lasted until 2019, the cryptocurrency later took off, hitting records through the beginning of this year.
With new negative catalysts cropping up — from China’s financial institutions barring crypto transactions to Tesla halting vehicle purchases paid in bitcoin — Saporu said this may be a great entry point for long-term investors. He warned, however, that bitcoin will likely move lower in the short term.
As for the best time to buy into bitcoin, Saporu suggests using dollar-cost averaging.
“I think right now would be a great time,” he said. “If you were buying at the higher levels, you should be buying now.”
In the same interview, JC O’Hara, chief market technician at MKM Partners, shared his take on the turbulent trading.
“What a day for crypto. I think it serves as a good reminder about just how volatile these currencies can be,” he said, adding that volatility can often evoke emotional responses from investors.
To get an unbiased read on the trade, he suggested using technical charts.
“When I look at the chart of bitcoin, I don’t think the selling is over just yet,” O’Hara said.
Ethereum, on the other hand, “has a much different technical makeup,” O’Hara said.
Zooming into the chart, he noted that ethereum has formed a bullish cup-and-handle pattern, which technicians often see as indicating an upward trend ahead.
“I believe that anybody who missed that initial breakout, buying that initial breakout, we have a second opportunity right here at current levels,” he said. “I would avoid bitcoin for right now and I would focus on ethereum, because I think ethereum is buyable right here.”
