This prediction comes at a time when Bitcoin has seen a significant rally, starting from below $45,000 in early January and recently reaching highs above $64,000.
With its recent rise above $64,000, Bitcoin has once again proven its appeal to a wide range of investors.
Amid this bullish trend, Galaxy Digital Holdings CEO Michael Novogratz shared his thoughts and hinted at a possible short-term correction that could take Bitcoin’s value to the $50,000 range.
In an interview on CNBC last month, Novogratz had predicted that the price of Bitcoin could potentially fall to $42,000 in response to market dynamics or regulatory disruptions. However, even as he presented these figures, his bullish sentiment about the future of the cryptocurrency market was evident.
Bitcoin Threatens to Fall to $55,000
Novogratz’s latest prediction was shared during a Bloomberg TV interview in which he gave his perspective on the current state of the cryptocurrency market. The CEO of Galaxy Digital Holdings called recent market behavior a “Pricing” phase, which has been driven in part by the launch of Bitcoin spot ETFs, which have ushered in a new wave of investment in the sector.
Novogratz highlighted the importance of the current phase for BTC, characterizing it as a period of true price discovery, stating that “This is the first time that anyone who wants to buy it has easy access to buy it.” His observation reflected the democratization of Bitcoin ownership, with greater accessibility driving greater market demand and enthusiasm.
Furthermore, BTC trading activity has witnessed an increase in volume, surpassing $80 billion on February 28 and surpassing $93 billion. a milestone last reached in 2022.
Despite the positive trend, Novogratz noted concerns about market leverage, particularly among younger investors, which he called “Millennials and Generation Z”—those who are drawn to the lure of quick profits. The Galaxy CEO noted the following:
“You have a lot of Millennials and Generation Z doing 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 stock could lead to major market corrections, underscoring the inherent risks of high-leverage investment strategies.
So far, Bitcoin’s recent drop from its high of $64,000 has resulted in nearly $300 million in total liquidations in 24 hours, leaving nearly 100,000 traders trapped in a wave of losses, according to data from Coinglass.
This situation illustrates the high stakes in cryptocurrency trading, where significant price movements can result in a significant financial impact for investors.
Novogratz noted a shift in leverage between the 2021 bull market and current market conditions, noting that institutional players have reduced their leverage, while retail traders, particularly through offshore platforms, continue to trade at high risk and leverage.
Bitcoin Future Course
Despite the possible short-term volatility, Novogratz remains optimistic about BTC’s long-term development. He emphasized the cyclical nature of the market and said that while “boom and bust” cycles may occur in the short term, the overall trend for Bitcoin is positive.
This view is supported by the growing interest of retail and institutional investors who are investing part of their portfolios in BTC as they recognize the value of the digital asset.
Additionally, the on-chain data shows an interesting trend in the “Newbie Whales,” that is, Bitcoin holders who purchased their coins in the last 155 days. According to Ki Young Ju, CEO of CryptoQuant, this group of investors currently has a larger amount of unrealized gains than ever after the recent rally.
By Audy Castaneda
