More Bitcoin Pain Left, BTC Can Test $38,000 Bottom Says Mike Novogratz
The world’s largest cryptocurrency Bitcoin has tanked another 3% amid a brutal sell-off pushing the BTC price under $42,000. Well, the biggest question is whether if this is the new bottom for Bitcoin investors. And the answer is NO!
Popular crypto investor and former Goldman Sachs manager – Mike Novogratz – said that Bitcoin has well enough chances to slip under $40,000 and test a new bottom at $38,000 before gaining any upward momentum. He said that this is where institutional investors might chip in once again speaking at the CNBC’s Squawk Box program on Thursday, January 5.
“I know big institutions who are going through their process to put positions on. They’re going to see those as attractive levels to buy,” said Novogratz. “On the charts, $38 [thousand], $40 [thousand] feels like where we should bottom.”
Bitcoin has been on a continuous downward trajectory over the last month. Since its all-time high of $69,000 in November, the BTC price has corrected more than 40%. Well, such massive corrections have always been part of Bitcoin’s price volatility over the last decade.
Fed Tightening the Monetary Policy
Post the Fed commentary on Wednesday, most of the asset classes have been heading downwards pretty fast. The fact that Fed is willing to tighten its monetary policy faster than expected has forced investors to move to safe-havens. Novogratz added:
“All of us, every single investor out there, has to have some part of their head that says, “Are we going into a paradigm shift, right? We’ve had this philosophy that the Fed’s gonna keep rates low forever and even now, they’re going to raise rates to 2% over two years gradually and continue to buy Treasuries for a while. So we’re in this liquidity bubble.”
The U.S. consumer inflation has surged to a staggering 6.8% in 2021. Thus, the Fed could possibly take even bold measures to keep it under check. However, Novogratz said that there’s no need to panic at this time. He further continues to remain bullish on institutional participation.
“Crypto had a monster year last year. It’s hard to think you’re going to grow to the sky nonstop. This is a pullback. We see a tremendous amount of institutional demand on the sidelines. I’m not nervous in the medium-term,” he added.