Mike Novogratz, CEO of digital asset manager Galaxy Digital, warned against trying to predict a bottom to the recent crypto crash.
Novogratz’s comments come in the wake of one of the worst downturns seen by the crypto market in recent times. Majors such as Bitcoin and Etherum are trading nearly 60% below their record highs, while most altcoins have slumped as much as 80%.
Galaxy Digital was also a major in Terra, arguably the biggest casualty of the recent rout. Novogratz, who was a vocal supporter of the project, has also publicly apologized for Terra, which is estimated to have wiped out $40 billion worth of investor holdings.
Novogratz warns against bottom picking
Commenting on the recent crash, Novogratz said that trying to pick a bottom is extremely high-risk, stating that the market could possibly crash further.
Alts are down over 80 percent from the highs. In (2018) it was over 95 percent. That is down another 70 percent. My point is picking bottoms is dangerous and if you do scale in slowly.
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-Novogratz
The factors that have driven the latest crypto crash- high inflation and rising interest- are still largely in play. Markets are widely pricing in an interest rate hike by the Federal Reserve at its next meeting.
Recent data also showed U.S. inflation will take much longer than expected to cool, pointing towards more economic pressure.
Where is the crypto bottom?
With the latest crash erasing over $500 billion from crypto market capitalization, investors are racing to guess the reversal point for markets.
Bitcoin, which is a bellwether for crypto markets, was expected to hold $28,000 as a hard support. But the token has fallen below that level repeatedly, and is still hovering slightly above the level.
Technical indicators for Bitcoin are also dour. The token recently saw a death cross- a drop in its short-term moving average below a longer-term moving average.
Historically, a death cross has always resulted in more losses for the token, and in turn, the crypto market.
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