Bitcoin Shake-Up: Galaxy CEO Novogratz Warns Of $55,000 BTC Drop – Here’s Why

With its recent surge above the $64,000 mark, Bitcoin has again proven its attractiveness to a broad spectrum of investors. Amid this bullish momentum, Michael Novogratz, the CEO of Galaxy Digital Holdings, has shared his insights, suggesting a possible short-term correction that could see Bitcoin’s value adjust to the mid-$50,000 range.

This forecast comes when Bitcoin has experienced a significant rally, surging from below $45,000  as of early January and recently touching highs above $64,000.

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Bitcoin Poised For Drop To $55,000

Novogratz’s prediction was shared during a Bloomberg TV interview, where he detailed his perspective on the current state of the cryptocurrency market.

The Galaxy Digital Holdings CEO described the market’s recent behavior as a phase of “price discovery,” driven in part by the inception of Bitcoin spot ETFs, which have ushered in a new wave of investment into the sector.

Despite the positive trend, Novogratz highlighted concerns over the market’s leverage, particularly among younger investors whom he called “millennials and Gen Z” drawn to the allure of quick gains. The Galaxy CEO noted:

You’ve got a lot of millennials and Gen Z YOLOing it, and they all will get some of that money and a lot of ’em will get wiped out.

He noted that this demographic’s aggressive trading behavior could lead to significant market corrections, underscoring the inherent risks of high-leverage investment strategies.

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So far, the recent retracement from Bitcoin’s peak of $64,000 has led to nearly $300 million in total liquidations within 24 hours, catching almost 100,000 traders of a wave of losses, as per data from Coinglass.

This situation exemplifies the high stakes in cryptocurrency trading, where significant price movements can result in substantial financial impacts for investors.

Novogratz pointed out a shift in leverage usage between the 2021 bull run and the current market conditions, noting that while institutional players have moderated their leverage, retail traders, particularly through offshore platforms, continue to embrace high-risk, high-leverage trading.

BTC price is moving sideways on the 2-hour chart. Source: BTC/USDT on

The Future Trajectory Of Bitcoin

Despite potential short-term volatility, Novogratz remains optimistic about BTC’s long-term trajectory. He emphasized the market’s cyclical nature, suggesting that while “boom-bust” cycles may occur in the short run, the overall trend for Bitcoin is positive.

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This viewpoint is supported by the growing interest from individual and institutional investors in allocating a portion of their portfolios to BTC’, recognizing its value as a digital asset.

Moreover, on-chain data reveals an interesting trend among “newbie whales,” or Bitcoin holders who have acquired their coins within the past 155 days. According to CryptoQuant CEO Ki Young Ju, this group of investors currently holds an all-time high amount of unrealized profit following the latest rally.

Featured image from Unsplash, Chart from TradingView

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Author: Samuel Edyme

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