Mike Novogratz: Wary of Bitcoin Price Drop to $6,500

Mike Novogratz: Wary of Bitcoin Price Drop to $6,500

If you haven’t been living under a rock, you know that Bitcoin isn’t faring too well. After over two weeks of non-action, during which the cryptocurrency market was stuck in a relatively tight 10% trading range, digital assets plunged.

Yesterday the top cryptocurrencies had lost 8% to 11%, falling to levels not seen in literal months. With Bitcoin, for instance, traded at $7,400 before recovering slightly today to reach $7600.

Although the optimists have argued that this is the “final shakeout” before a resumption of the uptrend to new all-time highs, the general consensus of investors the industry over is that Bitcoin still has room to fall from here. Here’s more on why.

Bitcoin Has Room to Fall

Speaking to CNBC’s “Squawk Box” panel on Thursday morning, Wall Street mogul Mike Novogratz argued that while “he wants [Bitcoin] to hold here,” his next downside target is $6,500 — around 13% lower than the current price of $7,400.

While he didn’t elaborate on the case for more downside during the segment, he did tell Bloomberg that there have been “a bunch of negative things” afflicting the broader crypto industry as of late.

One he specifically called out was the recent debacle that Telegram, a popular messaging application, has found itself in.

For those who missed the memo, the U.S. Securities and Exchange Commission (SEC) earlier this month “filed an emergency action and obtained temporary restraining order” against two entities behind the firm’s $1.7 billion ICO, Telegram Open Network (TON). The SEC’s co-director of Enforcement claimed in a release that it is doing this to “prevent Telegram from flooding the U.S. markets with digital tokens that we allege were unlawfully sold.” This marked the SEC’s most high-profile crypto-related action to date, some have argued.

Responding to this case, Novogratz said that the SEC’s decision to take action against Telegram “was a kick in the stomach to the overall crypto ecosystem,” seemingly referring to the growing sentiment that regulators are trying to deter financial innovation.

Other bearish fundamental developments include but are not limited to the anti-Libra sentiment seen spreading amongst global regulators and corporations, decreasing retail interest in cryptocurrency, and the fact that institutions overall have been slow to take the cryptocurrency plunge.

Not the Only One Targeting Sub-$7,000

Novogratz isn’t the only one targeting a sub-$7,000 price point for Bitcoin. Speaking to the Australian Financial Review, the “permabull” Thomas Lee of Fundstrat Global Advisors said that he sees the best risk/reward ratio for Bitcoin investors under $7,000, not at current levels.

While this wasn’t a prediction of another leg lower per se, this was a hint that another drop isn’t off the table.

Dave the Wave, a popular analyst on Twitter, has been a bit more definitive in his prediction. In a series of recent analyses posted on Twitter, Dave argued that all things considered, another move lower is almost 100% likely.

He claimed that per his fractal/geometric analysis of the last market cycle and the current, Bitcoin will bottom in mid-November at around $6,700, which is where there exists a confluence of technical levels: the 0.5 Fibonacci Retracement of the $3,200 to $14,000 move, the bottom of a descending channel, amongst other important levels.

Bitcoin’s chart confirms that bearish price action is inbound. The cryptocurrency is about to see what is known as a “death cross,” which is a technical chart formation that often spells disaster for assets. Previous death crosses for Bitcoin have seen months of downtrend follow said crosses.

The post Mike Novogratz: Wary of Bitcoin Price Drop to $6,500 appeared first on Blockonomi.

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