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Mike Novogratz believes Bitcoin can test the $38,000 bottom

Mike Novogratz, a well-known crypto investor and former Goldman Sachs management, believes Bitcoin has a good possibility of falling below $40,000 and testing a new bottom below $38,000 before finding any upward momentum.

Bitcoin, the world’s most valuable cryptocurrency, has dropped another 3% in a savage sell-off that has pushed the BTC price below $42,000. The main question is whether or not this is a new low for Bitcoin investors. And the answer is a resounding NO!

Speaking on CNBC’s Squawk Box program on Thursday, January 5, he indicated that this is where institutional investors might come in.

“I know big institutions who are going through their process to put positions on.”
They’re going to see those as attractive levels to buy,”
So, Novogratz says.
“On the charts, $38 [thousand], $40 [thousand] feels like where we should bottom.”
Then, Novogratz finalizes.

Over the previous month, Bitcoin’s price has been steadily declining. The BTC price has dropped by more than 40% since its all-time high of $69,000 in November. Over the last decade, significant price corrections have always been a hallmark of Bitcoin’s price volatility.

Following the Fed’s statement on Wednesday, most asset classes have been rapidly declining. The Fed’s willingness to tighten monetary policy sooner than expected has prompted investors to seek refuge in safe-haven assets. So, Novogratz goes on to say:

“All of us, every single investor out there, has to have some part of their head that says,”
“Are we going into a paradigm shift, right? We’ve had this philosophy that the”
“Fed’s gonna keep rates low forever and even now, they’re going to raise rates to 2% over two years”
“gradually and continue to buy Treasuries for a while. So we’re in this liquidity bubble.”
More so, Novogratz adds.

In 2021, consumer inflation in the United States reached an all-time high of 6.8%. As a result, the Fed may have to adopt even more drastic measures to keep it in check. However, according to Novogratz, there is no need to be concerned at this time. He’s also still optimistic about institutional participation.

“Crypto had a monster year last year. It’s hard to think you’re going to grow to the sky nonstop.”
“This is a pullback. We see a tremendous amount of institutional demand on the sidelines.”
“I’m not nervous in the medium-term,”
Lastly, Novogratz concludes.

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