In the last 24 hours, the price of Bitcoin and many cryptocurrencies may have taken a double-digit percentage drop, but as regards to the market as a whole, some crypto experts still seem to be cautiously optimistic.
Galaxy Digital founder Mike Novogratz said that it was “going to take a while” for crypto markets to consolidate and find a bottom as the price of Bitcoin (BTC) dipped to $30,000 earlier in the day, according to interview he did with CNBC’s Squawk Box on Wednesday.
Having been more than $42,000 at the close of stock markets yesterday, Novogratz’s comments came when the price of the crypto asset was roughly $38,000.
According to Novogratz, now we’ve got a liquidation event and you had a confluence of events: a combination of tax day, Elon Musk tweets, what not and we started breaking down the positivity in the price action, it’ll consolidate for a while, and it is not going to bounce back.
The price rebounded slightly to reach $42,434 before sliding back under $40,000. At the time of publication, the price is in the $38,000 range, though Bitcoin could hit a bottom at $36,000 or $38,000m according to the Galaxy Digital CEO estimate.
There are likely many factors at play concerning the recent crypto market volatility. Cryptocurrency prime broker Genesis Global Trading reported there was a Bitcoin-driven sell-off overnight due to forced liquidations and levered closeouts. Meanwhile, the firm said many Ether (ETH) cash buyers came in when the price of the token dropped under $2,000 for the first time since early April, and macro funds were buying BTC when the price hit $35,000.
“While the initial volumes at the beginning of this morning’s rally off the lows were muted, we’re seeing the market stabilize with more consistent institutional appetite,” said Genesis.
Others in the crypto space — including Konstantin Boyko-Romanovsky, CEO and founder of validator node hosting platform Allnodes, and Steve Ehrlich, CEO and co-founder Voyager Digital — said the recent price drops may be attributed to people migrating their investments following reports that China had allegedly banned crypto exchanges, services and transactions. Three associations in the country recently outlined issues related to crypto investments and warned people of the market risks.
“Correction in the cryptocurrency market is a common phenomenon,” said Boyko-Romanovsky. “It doesn’t mean, however, that a bear market is underway. The latter would be the case if the blockchain industry were showing signs of slowing down. That can’t be further from the truth.”