With its recent rise above the $64,000 mark, bitcoin has once again proven its appeal to a wide spectrum of investors. Amid this bullish momentum, Michael Novogratz, CEO of Galaxy Digital Holdings, has shared his ideas, suggesting a possible short-term correction that could see bitcoin's value adjust to the mid-$50,000 range.
This forecast comes as bitcoin has seen a significant rally, going from below $45,000 in early January and recently touching highs above $64,000.
bitcoin set to fall to $55,000
Novogratz's prediction was shared during a Bloomberg TV interview, where he detailed his perspective on the current state of the cryptocurrency market.
The CEO of Galaxy Digital Holdings described recent market behavior as a “price discovery” phase, driven in part by the creation of bitcoin spot ETFs, which have ushered in a new wave of investment in the sector. .
Despite the positive trend, Novogratz highlighted concerns about market leverage, particularly among younger investors whom he called “millennials and Generation Z,” attracted by the lure of quick profits. The Galaxy CEO noted:
You have a lot of millennials and Generation Z YOLO, and they will all get some of that money and a lot of them will be eliminated.
He noted that the aggressive trading behavior of this demographic could lead to major market corrections, underscoring the inherent risks of high-leverage investment strategies.
So far, the recent pullback from bitcoin's peak of $64,000 has led to nearly $300 million in total liquidations in 24 hours, trapping nearly 100,000 traders in a wave of losses, according to data from Coinglass.
This situation exemplifies the high stakes in cryptocurrency trading, where significant price movements can lead to substantial financial impacts for investors.
Novogratz noted a shift in the use of leverage between the 2021 bull run and current market conditions, noting that while institutional players have moderated their leverage, retail traders, particularly through offshore platforms, continue to embrace leverage trading. high risk and leverage.
bitcoin's future trajectory
Despite potential short-term volatility, Novogratz remains optimistic about btc's long-term trajectory. He emphasized the cyclical nature of the market, suggesting that while “boom and bust” cycles may occur in the short term, bitcoin's overall trend is positive.
This view is supported by the growing interest of individual and institutional investors in allocating a portion of their portfolios to btc, recognizing its value as a digital asset.
Additionally, the on-chain data reveals an interesting trend among “newbie whales,” or bitcoin holders who acquired their coins in the last 155 days. According to CryptoQuant CEO Ki Young Ju, this group of investors currently holds a record amount of unrealized gains following the latest rally.
bitcoin?src=hash&ref_src=twsrc%5Etfw” target=”_blank” rel=”noopener nofollow”>#bitcoin Fledgling whales hit an all-time high of $7.3 billion in unrealized profits, marking unprecedented gains. pic.twitter.com/lCwfoK15ng
– Ki Young Ju (@ki_young_ju) February 28, 2024
Featured image from Unsplash, chart from TradingView
