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As Bitcoin (BTC) faces a sudden drop, legendary trader Peter Brandt has shared his insight into market turns and the impact of maintaining “over-sized” positions.
According to Peter Brandt, periods of market turns are where traders face the biggest financial losses and emotional stress.
Market turns occur when an asset records a sharp shift in direction. While these market turns and drawdowns cannot be ruled out in a standard trading session, Brandt has always advocated conservative bets.
The current market with spot Bitcoin ETF as a catalyst is quite volatile. Though market experts believe the inflow of funds into the market can stabilize prices long-term, the recent drawdown has triggered concerns.
Peter Brandt Avoids Pyramid Trades
Peter Brandt suggests that market turns can cause significant damage to traders’ accounts, especially if they have taken large positions without proper risk management.
The trading expert said market turns are the reasons he does not do pyramid trades. This form of trading involves the introduction of additional positions to an existing trade. However, adding to positions during volatile periods can increase risk and amplify losses if a market turn occurs.
Market turns are where the biggest capital AND emotional drawdowns occur. And, if a trader is over-sized, market turns are when accounts are rekt. $BTC
Market turns are also a reason I do not pyramid trades pic.twitter.com/6ZumdfERkB— Peter Brandt (@PeterLBrandt) March 19, 2024
The Bitcoin price chart he shared shows sharp turns after a period of growth. A major insight from this is that these turns are part of the market. The current market outlook aligns with his previous call that a 15% to 20% slip in Bitcoin price cannot be ruled out.
With years of experience under his belt, Peter Brandt shares insight into key market trends with unfiltered takes about the top coins in the market. Besides his take on BTC, Peter Brandt often flags Ethereum (ETH) with a bet the coin might not be relevant in 10 years.
He also asserted last December that ETH was forming a rising wedge pattern, with a potential to drop to $650. However, Brandt changed his stance following the approval of the spot Bitcoin ETFs.
The Reality of Market Downturn
With the price of Bitcoin now trading for $63,744, down by 5.54% in 24 hours, the liquidation figure from CoinGlass shows that $524.33 million has been lost in the market within the timeframe. The data shows that 222,681 traders have been “rekt” with the slip in BTC’s price.
Related liquidations are a part of the market cycle. However, the figures in recent times show more traders and capital are now placed as bets in these nascent asset classes.