After bitcoin (BTC) topped out at $13,900, Michael Novogratz of Galaxy Digital revealed he sold a little but wishes he had sold a lot. In an article from Bloomberg, Novogratz is reported to have predicted a $7000-10,000 trading range for BTC, calling a $14,000 top a few days later owing to excitement in the market, June 27, 2019.
Sell High, Buy Low
Michael Novogratz’s desire to sell his BTC and re-enter at $10,000 is something all investors try to do, but is it wise to predicate an investment strategy?
Predicting key levels that BTC could reach based on past liquidity and historical data is a critical component to any price analysis, but trying to time the market may prove to be a fatal mistake for investors. As one of the most notable investors in the space, Novogratz must certainly have a logic backed thesis for his entries and exits other than mere price action.
Bitcoin’s capitulation during bull markets usually lasts 16 days on average and corrects around 36 percent, according to fund manager Matt Kaye. As per these assumptions, BTC could see a cool off to the $8,900 region. The main aspect of uncertainty is whether this particular parabolic wave, not the macro outlook, is over.
When Alt Moon?
The biggest talking point today is why altcoins are following bitcoin on its way down, but not on the way up. Former commodities trader and crypto analyst, Peter Brandt, believes most alts are valueless and there will be no alt season. While there is no data to back this theory, it is plausible that the market has matured from the excessive lust for gains from 2017.
A more evidential theory suggests that alt season is not here yet because of the adoption of stablecoins in investor portfolios. 2018 and 2019 have seen monumental surges in the number of traders using stablecoins to hedge crypto volatility. In 2017, when bitcoin started to capitulate, investors who couldn’t or rather wouldn’t move to fiat decided to push a portion of capital into alts, causing a massive explosion in major alts like ETH toward mid-January 2018.
With a more seasoned market comes more rational thought processes. Since BTC corrections can now be hedged through stablecoins rather than alts, it’ll take a significant fundamental push to witness the next alt season. More specifically, the alts with strong value and functional networks will witness value booms while the relatively worthless tokens will be ignored by the market this time around.
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