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Stock Rebound is Trap, Go Bitcoin Instead: Galaxy Digital CEO

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Billionaire Michael Novogratz said that the recent rebound in stocks might lead to another decline soon. Instead, he is confident in Bitcoin and gold.


Bitcoin Will Be Among Ideal Safe-Havens

Novogratz, CEO of crypto merchant bank Galaxy Digital, told CNBC’s “Squawk on the Street” that investors shouldn’t be misled by the recent spike in stock prices. Instead, buying non-stock assets, including cryptocurrency and gold, would be the right approach.

The US stock indexes have been bullish amid cautious optimism around the coronavirus pandemic. However, Novogratz doesn’t buy it.

I think this is short covering. I think one or two more days and people will sell into it, the billionaire said.

He stressed that he was still bullish on Bitcoin, even though the largest cryptocurrency experienced one of its worst crashes last month. The price has recovered a big chunk of its losses since then however, and is currently trading above $7,300. Novogratz added:

I have a big bitcoin position. I continue to add to it partly because I think this is an amazing environment for both being long gold and long Bitcoin.

He suggested that the fiat supply is growing on steroids, as the Fed is pumping trillions to save the US economy.

Money is growing on trees right now. And I learned when I was a little kid that money really doesn’t grow on trees. And when you have a global, money printing orgy going on… at one point that comes home to roost, and so I think hard assets are going to be a big buy, Novogratz concluded.

Should You Listen to Novogratz?

Galaxy Digital boss has always been bullish on Bitcoin, so there is nothing unusual about his latest comments. The interesting thing about Novogratz is that he has big connections on Wall Street, and his voice might reflect the mood of some of his fellows from the financial elite.

For example, the billionaire is a member of Kappa Beta Phi, a very secretive Wall Street organization that has been around for about a century. The society, whose recruits are dressed in drag and ridiculed by veterans, includes top executives and officials like former New York City mayor Michael Bloomberg and BlackRock CEO Laurence Fink. Interestingly, BlackRock was hired by the Fed to buy corporate bonds and other assets on behalf of the US Treasury.

Do you think Bitcoin will update the ATH by the end of this year? Share your thoughts in the comments section!


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3 reasons why Bitcoin price has not been able to rally back above $40K

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The ongoing story for the past couple of months in the cryptocurrency market has been confusion on whether Bitcoin (BTC) is destined for another leg down or is finally ready to break out toward new highs.

Bitcoin’s price history and data from previous corrections suggest that the current struggles for the top cryptocurrency could persist for a little bit longer due to the strengthening dollar, the possibility of decreasing economic stimulus and a slew of technical factors connected to Bitcoin’s price action.

A strong dollar threatens Bitcoin’s recovery

According to data from Delphi Digital, one of the biggest factors placing strain on risk assets around the globe is the strengthening U.S. dollar which appears to be attempting a trend reversal after falling below 90 in late May.

DXY 1-day chart. Source: TradingView

Rising dollar strength put a halt to the year-long uptrend in the 10-year US Treasury yield which is also a reflection that the economic expansions seen in the first half of 2021 are beginning to lose steam and there is a threat that a new wave of Covid-19 infections threatening the global economic recovery.

Fractals and the Death Cross suggest the correction is not over yet

The short-term outlook for Bitcoin remains bearish as previous instances of the “Death Cross,” which appeared on BTC’s chart in late June, have been followed by a corrective period that can last for nearly a year.

Bearish crossover of the 50 day and 200-day MA. Source: Delphi Digital

According to the analysts at Delphi Digital, the 12-month moving average is being tested as support, and a dip below this level would signal further downside for BTC price.

Bitcoin price testing the12-month moving average. Source: Delphi Digital

The 12-month moving average has been a key support level for Bitcoin historically, so how the price performs near this level could dictate whether the current uptrend remains intact.

Related: El Salvadorians take to the streets to protest Bitcoin law

Overall, caution is warranted for traders because low volumes have historically led to higher volatility when fewer open bids can lead to rapid price fluctuations.

As explained by Kevin Kelly, a certified financial analyst at Delphi Digital, “the short-term outlook turns quite a bit more bearish if and when we break those key levels” near $30,000.

Kelly said:

“I don’t necessarily think that we will see as nearly as significant of a drawdown as we did in say, post-December 2017, early 2018, and into the end of that year. But I do think, just given the structure of the market, that we could potentially be in for a bit more short-term volatility and potentially some more headwinds here, in the near term.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.