Michael Novogratz Predicts Bitcoin Correction Before Achieving Historic High

Bitcoin Mike Novogratz Miner

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Hongji Feng

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Hongji Feng

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Hongji is a crypto and tech reporter. He graduated from Northwestern University's Medill School of Journalism with a Bachelor's and a Master's. He has previously interned at HTX (Huobi Global),...

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March 1, 2024 00:27 EST

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Michael Novogratz, the CEO of Galaxy Digital Holdings Ltd., has issued a warning to investors about a forthcoming dip in Bitcoin’s value amidst its current rally.

During an interview with Bloomberg TV, Novogratz detailed his expectations for Bitcoin’s market movements. He predicted that, despite the digital currency’s impressive gains this year, a correction would precede a significant rise to new, never-before-seen heights.

“I wouldn’t be surprised to see some corrections and some consolidation,” said Novogratz. “If it corrects, it might correct to the mid-$50,000s, before taking off to the new high.”

“Market is too leveraged right now”

Novogratz also touched on the issue of market leverage, comparing the current investment landscape to that of the bull run in 2021.

Novogratz stated that a shift occurred in leverage dynamics, with institutional investors playing a more conservative role while retail investors, particularly millennials and Gen-Z, have been taking on significant risks through leveraged positions offered by offshore platforms.

“I think the market is too leveraged right now. It happens after huge runs,” said Novogratz. “There will be a wash out. People can’t sustain this much leverage.”

At the time of writing, Bitcoin is trading at $61,528, 20.22% up from a week ago.

As Galaxy Digital is among the contenders applying for a spot Ethereum exchange-traded fund (ETF), the CEO anticipated that the Securities and Exchange Commission (SEC) will green-light Ethereum ETFs within the year.

Highest BTC Spot Trading Volume Since FTX Collapse

Based on the statistics provided by Kaiko, the spot trading volume of Bitcoin on centralized exchanges has reached the highest level of activity since the collapse of FTX, marking a significant $34.05 billion.

#Bitcoin average trade size on centralized exchanges hit its highest level in more than a year 🚀 pic.twitter.com/MGDkmFkJPI

— Kaiko (@KaikoData) February 29, 2024

Binance led the way with a trading volume of $17.09 billion. Following behind were Bybit and Coinbase, with volumes of $3.5 billion and $2.98 billion, respectively. OKX and Kraken also contributed significantly, posting volumes of $2.92 billion and $1.05 billion.

On the other hand, Bitcoin miners are selling their holdings in anticipation of the upcoming halving event, coinciding with heightened market activity and the increase in Bitcoin price.

According to Glassnode’s analysis, miners have reduced their holdings by 8,426 BTC since the beginning of the year. This decrease brought miners’ total Bitcoin holdings to 1,812,482 BTC, marking the lowest level since July 2021.