Billionaire Michael Novogratz believes the bottom is in for the cryptocurrency market this year — but is his call premature?
Novogratz is a former hedge fund manager for investment firm Fortress Investment Group and was a partner at financial giant Goldman Sachs. He now spends his time making waves in the cryptocurrency waters as the CEO of Galaxy Investment Partners, a cryptocurrency investment firm.
“I think we put in a low yesterday,” Novogratz tweeted on September 13 — while also noting that the Bloomberg Galaxy Crypto Index “retouched the highs of late last year and the point of acceleration that led to the massive rally/bubble.” The index in question measures the performance of the largest digital currencies traded in dollars, as noted by CNBC.
This is the BGCI chart…I think we put in a low yesterday. retouched the highs of late last year and the point of acceleration that led to the massive rally/bubble… markets like to retrace to the breakout..we retraced the whole of the bubble. #callingabottom pic.twitter.com/EasTBYgjSj
— Michael Novogratz (@novogratz) September 13, 2018
Jumping the Gun?
Novogratz has been notably bullish on cryptocurrencies throughout 2018 — which is to be expected, given that he is the CEO of a cryptocurrency investment firm. However, his call that the bottom is in could very well be premature.
Bitcoin is in the throes of a bear market — a fact which cannot be denied. Every rally this year has put in a lower high, while trading volume continues to decrease. Trading volume also goes out of the cryptocurrency market as soon as it goes in, as evidenced by the market leader’s latest cascading selloff.
Furthermore, Bitcoin is in very real danger of collapsing through its key support level of $6,000.
Patience is a Virtue
Nevertheless, Novogratz believes cryptocurrencies will bounce back. To be fair, they probably will — at least, Bitcoin will. “Markets like to retrace to the breakout,” he noted in his tweet. “We retraced the whole of the bubble.”
When the seemingly inevitable bounce back occurs, it will most likely come via the market leader. Bitcoin has seen its dominance increase significantly in 2018, and it’s within the realm of possibility we could see the first and foremost cryptocurrency once again claim 70 or 80 percent of the total market.
Do you think the bottom is in for Bitcoin and/or the cryptocurrency market? Let us know your thoughts in the comments below!
Images courtesy of Shutterstock, Twitter/@novogratz, blockchain.info, TradingView.