As Bitcoin surges toward its previous all-time high, industry experts are anticipating a correction before the digital asset can continue its upward trajectory.
Mike Novogratz, founder of Galaxy Digital, shared his insights with Bloomberg TV, suggesting that while Bitcoin has soared past the $60,000 mark this week, a correction is likely imminent.
Bitcoin Enters “Price Discovery” Phase
“I wouldn’t be surprised to see some correction and some consolidation, but I’m very loath to pick a Bitcoin high because I really do believe this is price discovery,” stated Novogratz, highlighting the ongoing exploration of BTC’s true value.
He elaborated that a correction could see Bitcoin fall to the mid-$50,000s before experiencing another surge to set a new high. The recent price surge, fueled by the approval of spot BTC ETFs in the U.S., has propelled Bitcoin into a “price discovery” phase, attracting new investors.
Novogratz cautioned that the market has become overly frothy, with retail investors leveraging their positions to an unsustainable extent. He warned that many investors, particularly millennials and Gen Z traders, could face losses in such a volatile environment.
Despite short-term fluctuations, Novogratz remains bullish on Bitcoin’s long-term prospects, pointing to the potential influx of baby boomer wealth into the cryptocurrency market.
With baby boomers accounting for approximately $85 trillion in wealth, a small shift of 1% to 3% of their investments into Bitcoin could significantly boost the value of the digital asset.
“3% of that is two and a half trillion. The whole market cap of Bitcoin is only a little more than 1.2 trillion,” he said.
Caution Amidst Bullish Surge
The recent rally saw Bitcoin reaching highs not seen in over two years, briefly touching $64,000. Bitcoin’s price is currently at $61,500, according to CoinGecko data.
This rally has sparked comparisons to Bitcoin’s prior all-time peak of almost $69,000 in November 2021, causing certain investors to speculate that it might signify the onset of a fresh bull market for cryptocurrencies.
However, co-founder of Matrixport, Daniel Yan, recently urged caution amidst the bullish sentiment. Yan warned about being overly optimistic, pointing out that overly enthusiastic market sentiment and uncertain macroeconomic factors could increase volatility.
Euphoria: the sentiment of the market has come to a level where I think we should be cautious – may be a good idea to revisit my pinned tweet on the size of potential corrections. I think we should see another healthy ~15% correction by end-April.
— Daniel Yan (@_D_Y_A_N) February 28, 2024
Yan also advised investors to consider the potential for corrections, predicting a retracement of approximately 15% by the end of April.
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