Traders have been caught off guard by the bitcoin and crypto market's downturn, with the bitcoin ... [+]Getty Images
Bitcoin and other cryptocurrencies have seen a sharp decline after a strong rally sparked by Donald Trump's U.S. election victory. The price of Bitcoin dropped to nearly $90,000 from almost $100,000 earlier in the week, erasing roughly $200 billion from the total $3.2 trillion cryptocurrency market.
This downturn comes amid growing concerns about the market's future, as a recent leak suggests a significant shift on Wall Street could impact Bitcoin in the coming year. Crypto billionaire Michael Novogratz has warned that Bitcoin's price might fall to $80,000 before stabilizing.
“There’s a lot of leverage in the system right now,” said Novogratz, CEO of Galaxy Digital, in an interview with CNBC. “The crypto market is heavily leveraged, which naturally leads to corrections.” While he anticipates a drop to $80,000, he doesn’t expect Bitcoin to fall below that level, a price point that predates Trump’s election win and the subsequent boost for crypto regulation.
Novogratz remains optimistic about Bitcoin's long-term potential. He highlighted the pro-crypto stance of Trump’s incoming administration and predicted that Bitcoin would eventually surpass $100,000. “Usually, when you hit $100,000, you might see a slight pullback, but I wouldn’t be surprised if it climbs even higher. Supply is limited, and we’re in price discovery mode,” he added.
However, not everyone shares Novogratz’s confidence. Some analysts are bracing for further declines before a recovery. Alex Kuptsikevich, chief market analyst at FxPro, noted that Bitcoin’s dip below $93,000 on Tuesday marked the fourth consecutive day of losses. He attributed the drop to profit-taking and geopolitical factors, which have dampened the momentum from the recent rally.
Kuptsikevich pointed out critical support levels, suggesting that if Bitcoin doesn’t hold around $91,800, the next target for bearish traders could be $87,000. “Monday’s attempt to push above $99,000 triggered more selling pressure, signaling a broader pullback across the market,” he explained.
As traders monitor the market closely, uncertainty looms over how much further Bitcoin’s price could fall before finding a solid footing.
