By Shelly Melancon (Switzerland)
The leading digital asset lost another 3.5% in the last 24 hours following additional intense selling pressure, which has seen the coin trade below $42K.
Startling Claims By Mike Novogratz
Thus, the question on every investor and traders’ lips is whether BTC will make a rebound from this level onwards. Unfortunately, the answer is a resounding no, and that’s according to Galaxy Digital CEO and crypto investor, Mike Novogratz.
Novogratz claimed that BTC will still trade at sub $40k levels before making any bullish move. He also said institutional investors would start making their entry positions once BTC starts trading around the $38K to $40K levels. Novogratz made these claims during a January 5 interview with CNBC.
After setting a new peak price of nearly $70K two months ago, BTC’s price has been on a decline. As of this writing, it has lost nearly 40% of its November 2021 price. The crypto Fear & Greed index is now deep within the extreme fear region at 15%. When it reached this zone around July 2021, BTC traded at the $33.5K level. However, long-term traders and investors shouldn’t be surprised at BTC’s price correction since its price has been highly volatile for more than ten years now.
FOMC Outcome Effect On The Crypto Market
After a summary of Wednesday’s FOMC meeting was made public knowledge, the crypto market has been on a decline. Following the major highlight of the FOMC meeting that the Fed is taking a hawkish stance on interest rates, many investors started selling their digital assets and buying more inflation-proof assets.
Also read:Speaking on how this outcome has affected the crypto market, Novogratz said, “there is no investor that I know that hasn’t at one time, or the other asked himself the question, “Is this the start of a new paradigm shift? We’ve always been under the impression that the Fed will keep rates low forever.”
“But this news isn’t that bad since the Fed plans to increase the rates gradually over the next 24 months and isn’t stopping purchases by the treasury. Hence, we can say the liquidity bubble isn’t over yet,” Novogratz further said.
Novogratz Remains Bullish About BTC
One might expect the Fed to take more stringent measures to curb the rising consumer inflation rates, which surged to nearly 7% last year. But the galaxy boss opined that there is still no cause to worry. He said, “institutional investment into the crypto sector will continue to make it bullish.”
He further added, “last year’s growth in the crypto sector was crazy. It shouldn’t be a surprise that there is a correction; no asset keeps growing forever, there will be a few bumps along the way. I’m not worried at all over the short-term as numerous institutional investors are still waiting to take entry positions into the crypto industry.”
Following massive economic unrest, some analysts have attributed the fall to Kazakhstan’s internet shutdown. With many miners operating there, mining activities are almost on hold right now.
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