Galaxy Digital boss, Mike Novogratz, predicts that the Bitcoin price will enter a long sleep period aka consolidation phase. According to him, Bitcoin will not pump until a new market narrative emerges that can push its price up.
Effects of Fed Rate Cuts
According to Novogratz, there are two possible narratives that could trigger a resurgence in Bitcoin's price: a rate cut by a central bank or regulatory clarity on the cryptocurrency.
During the company's earnings call on Tuesday, Novogratz stated that the crypto is currently in a consolidation phase after a strong first quarter. He predicts the price of Bitcoin will move between $55,000 (around Rp809 million) to $75,000 (around Rp1.1 billion) until the next market event that could push the price higher.
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"Bitcoin always needs a narrative," Novogratz explained in an interview with Bloomberg on Tuesday. "If you think of Bitcoin as digital gold, there are always two narratives: one is macroeconomics, and two is adoption."
Bitcoin's price has historically been influenced by global macroeconomic trends, rising during periods of dovish central bank policy, and falling during periods of hawkish policy.
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Influence of Central Bank Policy
At the beginning of this month, the price of Bitcoin fell below $57,000 (around Rp838 million) due to concerns that the Federal Reserve will hint at a longer period of high interest rates at the upcoming FOMC meeting.
Although these concerns proved correct, the price of Bitcoin recovered after the meeting as the central bank simultaneously pledged to slow the pace of quantitative tightening, which is a boost to market liquidity.
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According to Novogratz, until macroeconomic data shifts and inflation begins to fall, the Federal Reserve will stick to its high-interest rate policy, as well as Bitcoin.
"Until you see moves in short-term interest rates both domestically and abroad, and/or more regulatory clarity, Bitcoin will probably trade in this range," he predicted.
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Bitcoin Price Booster Factors
Bitcoin's 50% rise in price in the first quarter was largely driven by excitement over the launch of a new Bitcoin spot ETF. However, the fund experienced a net outflow in the second quarter. Moreover, both the Bitcoin halving event and the launch of the Runes token standard also took place last month, leaving two more narratives behind this major crypto asset.
Clarity on Crypto Regulation in the US
Regarding regulatory clarity, Novogratz isn't sure it's coming for cryptocurrencies until after this fall's U.S. federal election. Currently, crypto has become a partisan issue in the United States, with the Biden administration likely to favor tighter restrictions on the industry, while Republicans want a friendlier approach to encourage financial innovation.
Enter a Consolidation Period
Referring to a report from CoinDesk, periods of Bitcoin price consolidation often occur after large spikes. This gives time for the market to digest major events and prepare for a new narrative. Additionally, a report from Bloomberg highlights the importance of Bitcoin spot ETFs in increasing institutional investor participation, which could be a factor driving future prices.
Conclusion
Mike Novogratz believes that Bitcoin is still in a consolidation phase until the emergence of a new narrative of central bank policy changes or regulatory clarity. Meanwhile, the crypto market as a whole continues to adapt to changing macroeconomic and regulatory conditions.
In closing, although Bitcoin may currently be in a hibernation phase, its growth potential still remains strong. With careful monitoring of central bank policy and regulatory developments, investors can put themselves in a better position to take advantage of future market opportunities.
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How to Buy Crypto on Bittime
You can buy and sell crypto assets in an easy and secure way through Bittime. Bittime is one of the best crypto applications in Indonesia that has been officially registered by Bappebti.
To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. In addition, also make sure that you have enough balance by depositing some funds into the wallet. For your information, the minimum asset purchase at Bittime is IDR 10,000. After that, then you can make a crypto asset purchase in the application.
Learn the Complete Guide on How to Buy Crypto on Bittime.
Monitor the price chart movements of Bitcoin (BTC), Ethereum (ETH), Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
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DISCLAIMER: This article is informational in nature and does not constitute an offer or solicitation to sell and buy any crypto asset. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices may change significantly from time to time and Bittime is not responsible for fluctuations in crypto asset exchange rates.
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