Bitcoin price “cut in half” from its high point! Galaxy Digital CEO warns: No bottom in two months

fiverr
 Bitcoin price "cut in half" from its high point! Galaxy Digital CEO warns: No bottom in two months
Bybit


With the world fleeing high-risk investments, the cryptocurrency market continued its decline following U.S. stocks for days. On May 10, Bitcoin finally fell below the psychological barrier of $30,000, hitting a new low in nearly 10 months.It has halved from its all-time high of $67,802 in November last year, a drop of more than 50%.

Billionaire cryptocurrency investor and Galaxy Digital CEO Michael Novogratz has warned that the cryptocurrency market will get worse before it gets better, and it will be hard to bottom in the next two months.

In just 24 hours, more than $700 million worth of cryptocurrencies were liquidated, according to data provided by Coinglass.

As more professional investors trade cryptocurrencies, the market is increasingly in sync with traditional markets and highly correlated with the Nasdaq 100 Index. The tech-heavy index is down 23% since the start of the year. In contrast, Bitcoin fell 31% over the same period.

Tokenmetrics

Michael Novogratz said on Galaxy Digital’s first-quarter earnings call on Monday:

Crypto trading may be linked with the Nasdaq until we reach a new equilibrium, my gut feeling is that there are more losses to come, at least for the next few quarters in a very volatile and difficult time trade in the market, and then people will feel in a state of equilibrium.

Fed to raise interest rates

The Federal Reserve raised interest rates by half a percentage point last week, and Wall Street responded with a slump in the stock market. Risk assets such as bitcoin were hit hard, and the total market value of cryptocurrencies has shrunk by more than 10% (more than $200 billion).

The U.S. dollar index (DXY), the biggest winner so far this year, has surged more than 8% since the start of the year and hit multi-decade highs.

Edward Moya, senior market analyst at Oanda, pointed out in an interview with “CNBC” that investor confidence is low, and the market will be dominated by consolidation for most of this year:

Bitcoin is really stuck in a sideways news cycle and you’re just waiting for Wall Street to calm down and then you’ll see more confidence in investing. I still think there’s a lot of long-term potential value here, but you have to be able to live with that volatility.

Institutional interest cools

Institutions are extremely optimistic about cryptocurrency investments in 2021, with major players such as Tesla, MicroStrategy, and several payment platforms entering the cryptocurrency space, driving the bullish momentum, but this does not carry over into 2022. Institutional crypto funds have seen outflows for four weeks in a row, according to CoinShares’ funding report.

Moya added that corporate and institutional investors are in “wait-and-see mode,” saying: “There’s an argument that mainstream adoption is taking a lot longer than people expect.”

Seeking a more secure foundation

Investors have sought a safe haven amid uncertainty, with more confidence in traditional assets as countries such as the U.S. fully recover from the pandemic and border closures end.

Bitcoin IRA co-founder Chris Kline told Yahoo Finance that some cryptocurrency investors are weighing other options and “moving their funds back into dollars and seeing what can be done.”

Bull-Bear Cycle

The cryptocurrency market is cyclical, with ups and downs. Since the advent of Bitcoin more than a decade ago, it has experienced four bull-bear alternations. If past cycles are any guide, the cryptocurrency market is likely to remain bearish for the rest of the year and into 2023, before turning again.

Edul Patel, chief executive of cryptocurrency investment platform Mudrex, said the rate hike gave individual and institutional investors pause to think about the future of the cryptocurrency market. “The downtrend is likely to continue in the next few days and Bitcoin could test the $30,000 level,” he said.

Anthony Scaramucci, founder of SkyBridge Capital, tweeted that if previous cycles are any guide, bitcoin’s price could bounce back after bottoming at $18,000.

But he was optimistic about Bitcoin’s longer-term trajectory, Scaramucci wrote: “The sell-off is not surprising to anyone who has studied Bitcoin and the nature of its growth and adoption. A crash equivalent to the previous cycle would be Taking Bitcoin to $18,000… The truth is that no one knows how the market will go in the near term. But if you believe in fundamentals and a long-term transformation of the economy, Bitcoin will be a $15 trillion asset and a big part of the future part.”

Paxful

Be the first to comment

Leave a Reply

Your email address will not be published.


*