BTIG's Julian Emanuel warns stocks could lose another fifth of their value.

If Congress doesn't immediately pass a coronavirus aid package designed to help the U.S. economy, he warns it'll spark more damage to an already battered market.

"We're in this situation where politics seems to be getting in the way," the firm's chief equity and derivatives strategist told CNBC's "Trading Nation" on Monday. "The politicians are playing with fire... If you wait long enough, you risk changing psychology incrementally more, and we all know between Monday and Friday, if anything, news in terms of the virus is likely to worsen."

On Sunday, the stimulus package failed its first procedural vote. It failed again Monday as lawmakers battled over specifics on aiding distressed businesses and unemployment protections.

The wrangling overshadowed the Federal Reserve's additional measures on Monday to help the markets. Not only did the Fed announce it will purchase more Treasuries and mortgage-backed securities, it also told investors it'd also buy corporate bonds and corporate bond exchanged funds in an unprecedented move.

"We were very happy with what the Fed did," said Emanuel. "But effectively, the Senate is canceling out the beneficial effects of the Fed's actions."

His S&P 500 level to watch is 1,764, a more than 20% drop from current levels. The index has already seen a 35% plunge from its all-time highs hit in mid-February.

However, he sees hope.

Emanuel, who came into 2020 as one of Wall Street's biggest bulls, is telling clients the key is to have a longer time horizon.

"Given all the stimulus, given our view that ultimately the virus will come under control — however long it ends up taking — is that stocks start to represent pretty reasonable values," Emanuel said. "We think you should be tip-toeing in with the expectation that you could go lower."

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