Cryptocurrencies are probably headed for more bouts of downside volatility and investors should consider reining in their risk, according to Fundstrat.
Buying put protection on long-crypto positions and cutting exposure to more speculative altcoins are a couple of safeguards, Sean Farrell, head of digital-asset strategy at the financial research firm, wrote in a note on Thursday.
Liquidity has been low and could tighten further over the U.S. Memorial Day holiday, while leverage in the Bitcoin market is increasing, according to Farrell. The macro outlook also remains unfavorable to risk assets as the Federal Reserve hikes interest rates and starts quantitative tightening, he said.
