A billionaire who successfully forecasted the bitcoin price aching sell-off to the $38K zone believes that the benchmark cryptocurrency will not be able to stage a meaningful recovery until the sinking stock market finds a floor.
Mike Novogratz, the veteran investor behind crypto-centric firm Galaxy Digital, shared his market outlook in recent tweets.
Bitcoin, Ethereum, Cardano Feel The Pain As Global Financial Markets Slide
Today’s correction caught the crypto sector with its pants down.
Crypto markets have sloped downward over the past 24 hours, led by Cardano (down 15.20%), Terra (down 26.12%), Ethereum (down 13.87%), and bitcoin (down 10.89%). BTC is changing hands at $35,764.64 at press time, having plummeted below $40,000 for the second time in two weeks. The total market capitalization has slimmed down by over 15% from yesterday.
The bloodbath can also be seen across other cryptocurrencies in the top 100, indicating that the market downturn cannot be pinned on any specific development from a couple of coins or tokens.
Interestingly, a similar bearish downtrend exists in the traditional financial markets. The Nasdaq Composite declined by over 1.2% at Friday’s close as Netflix earnings suffered a 20% fall. It’s worth noting that the Nasdaq set a record high two months ago but has since been falling since reports of the Omicron COVID-19 variant emerged. The Dow Jones and the S&P 500 have also tumbled by more than 1%.
European markets are also languishing in negative territory, with the pan-European Stoxx 600 slumping 1.5% during early trading.
What Does This Mean For Bitcoin?
With the weakness in the financial markets appearing to be the culprit behind bitcoin’s wipeout today, investors are now pondering the next price action for the flagship cryptocurrency.
According to Mike Novogratz, crypto has already experienced a decent retracement and is now leaping to some buying support. However, for bitcoin to rally, the stock market must first rebound. “Crypto will have a hard time rallying until stocks find a base,” he stated.
Earlier this month, Novogratz had predicted that bitcoin would crash to the $38K zone. And that’s exactly what happened. The billionaire investor was, however, confident the top cryptocurrency would not be stuck at that level for a prolonged period due to strong institutional demand.
That said, bitcoin and the rest of the cryptocurrencies need to gather momentum, and soon, or it could end in cataclysm for bagholders who have suffered substantial losses so far.