$8,500 to Be the Bitcoin Bottom
Mike Novogratz, the Wall Streeter turned diehard Bitcoin believer, recently graced the Bloomberg-affiliated Business News Network (BNN) in Canada to talk crypto.
Despite a growing number of analysts calling for a strong correction, Novogratz isn’t all too fazed, surprisingly enough. In fact, the former Goldman Sachs partner notes that he expects for a healthy consolidation, with $8,500 being the key price point to watch over the next few weeks.
He claims that this level, which is where the closest CME gap is, should act as a low in this move lower. You see, the exchange does not open its futures market during weekends, so there are often large gaps in price action, especially if Bitcoin spikes or collapses significantly on Saturday or Sunday. Over the course of the past 10-odd weeks, the CME futures have been subject to many of these gaps, a good majority of which were filled three or four later. If history is of any indication, Bitcoin is likely to revisit that price point in the coming weeks.
What’s Next?
So what comes after this period of consolidation? Well, new highs — that’s what. Or at least a revisiting of Bitcoin’s previous all-time highs of $20,000.
In an earlier interview, Novogratz claimed that if institutions continue to foray into this space, whether that be Spotify, Visa, Uber, and Facebook through Libra or otherwise, the aforementioned milestone should come with ease. Elaborating, the investor explained:
“I’m not selling the next time we hit $14,000. The second time we reach that level, [there may be] a move to $20,000. I don’t expect this to happen in the next few weeks: I don’t expect it to the middle or the end of the fourth quarter. But the next wave will come when the institutions — the state of X, Texas Teachers Union, and those guys — come in, and then you will see Bitcoin hit $20,000 and higher.”
The funny thing is that Novogratz is the only prominent analyst with this thought process.
Thomas Lee of Fundstrat told Yahoo Finance that the launch of Libra, Donald Trump’s reference of cryptocurrency, institutional involvement, and further macroeconomic unrest could help Bitcoin in reaching the $20,000 to $40,000 range by the end of the year. He elaborates:
“Bitcoin is now trading at a level that it’s only seen 3% of its historical days. If you go back to every milestone that that was achieved, bitcoin subsequently rallied somewhere between 200% to 400% within the next four months, so I think if that’s playing out this time that means bitcoin could be $20,000 to $40,000 sometime in the fourth quarter.”
Photo by Nikhita Singhal on Unsplash