Bitcoin Price to Drop Before Takeoff? Experts Predict Correction to $50K

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Bitcoin had a stellar February, surging by a whopping 45%, its most significant jump since December 2020. This surge, now marking the sixth straight month of gains, has experts buzzing about a potential crypto bull run. However, not everyone shares this bullish sentiment, with some analysts predicting a short-term correction before a big upward move.

Let’s dive into what experts are saying about Bitcoin’s near future.

Mixed Predictions: Expert Insights Unveiled

Galaxy Digital founder, Michael Novogratz, weighed in during a recent Bloomberg TV interview. Novogratz suggested that Bitcoin might pull back before hitting new highs, potentially retracing to around $55,000. His reasoning revolves around retail traders becoming overly leveraged before the anticipated climb.

On another note, he expressed expectations for an Ethereum spot ETF to secure SEC approval later this year.

More Information on this: Bitcoin Price Correction Rattles Market After February Highs

Understanding the Current Situation

Novogratz sees Bitcoin in a broader consolidation phase after its remarkable 40% surge this year. This surge was mainly fueled by the successful launch of Bitcoin exchange-traded funds (ETFs). Despite Bitcoin trading around $60,700, Novogratz described the market momentum as a “price discovery” phase, drawing in a new wave of investors.

$BTC is in price discovery phase. Maybe really for the first time since it’s been an asset as now the bulk of US wealth has easy access. Hard to predict where we stop.

— Mike Novogratz (@novogratz) February 28, 2024

Yet, he cautioned about high leverage levels among millennials and Gen Z investors, hinting at a possible correction. The observed leverage gap between institutional players and retail traders signals potential market correction and “washouts” before the upward trend resumes.

In simpler terms, price discovery is the process where buyers and sellers figure out an asset’s value. Analysts suggest that Bitcoin is currently in this initial discovery phase, thanks to increased accessibility to US investors through ETFs.

Read More: The Countdown to Crypto’s Biggest Events: Halving and the Ethereum ETF

Watch Out for Global Record Highs

Despite the talk of a short-term correction, Bitcoin is making waves globally, hitting record highs against various currencies this week. It has surged 16% higher than its previous peak against the Japanese yen and set new all-time highs against the Chinese renminbi, Russian ruble, Swedish krona, and New Zealand dollar.

As Bitcoin quickly approaches its previous highs in major currencies like the euro, British pound, Canadian dollar, and Australian dollar, experts predict more all-time highs in the coming months. This resurgence follows a strong rebound of the US dollar index, measuring the dollar’s strength against other currencies, in recent months.

Brace yourself for an exciting ride, with Bitcoin leading the charge.