Crypto billionaire and CEO Mike Novogratz says the market has more room to fall. However, he believes that Bitcoin will continue to fluctuate. However, it does not rule out that it may fall even further.
The trend of the cryptocurrency market, according to Mike Novogratz
Galaxy Digital CEO Mike Novogratz shared in a recent statement to CNBC that he expects further declines. The cryptocurrency billionaire said, “We’re going to go sideways… Can we go lower? Of course we can,” he said. Novogratz’s sentiment says the market will be “horizontal and volatile” for a while until the Fed reverses its hawkish monetary policy.
The billionaire also claims that the market is in the midst of a major correction due to excessive leverage. Novogratz adds that centralized crypto companies such as Celsius, BlockFi and Three Arrows Capital have enormous leverage. The three companies mentioned are among the biggest losses from the ongoing market crash so far. In other words, it pushes its entire market to the breaking point. Novogratz says that the leverage reduction process is not yet fully completed.
What worries Mike Novogratz?
The problem is that crypto lacks the hype that would drive prices higher by attracting new capital. Now the “inflation” hedge narrative is out the window. Bitcoin needs to find another compelling story to lure new buyers.
As you follow on Kriptokoin.com, in late 2021 Novogratz predicted a drop in Bitcoin due to the high correlation with the tech-heavy Nasdaq 100. Thus, he correctly predicted that it would underperform in the first quarter. In January, he warned that the largest cryptocurrency is “very vulnerable.”
Bitcoin briefly climbed above the $21,000 level earlier today. However, the bulls remain cautious about the prospects for a potential rebound.
Bulls are cautious, but Bitcoin is in a rush
Moving cautiously, BTC has been quietly trading above $21,000 in the last hours. Over the past three weeks, it has formed a lower pennant-like pattern on the daily time frame. But it has been struggling to break the 20 EMA lines for about a month now. As the pennant’s upper trendline coincides with the 20EMA level, the $21,000 level is blocking any buying efforts. Meanwhile, price action is stuck inside the pennant as it prepares for a possible choppy move.
On the technical side, the RSI’s position below the midline has resonated with bearish rhetoric for the past three months. A close above the 40 level helps buyers delay bearish moves. As a result, BTC is facing a short-term pullback on the charts, in light of a bearish pennant approaching EMA resistances, according to analyst Yash Majitia. A confirmed break below the pattern and the $18.9k mark will reaffirm the aforementioned targets.
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