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Bitcoin (BTC-USD) is about to see a correction before prices can resume climbing after the “very frothy levels” it reached, according to Michael Novogratz, founder of Galaxy Digital.
The coin rose to as high as 63,968 on Wednesday, it has come down about 1.24% today, reaching a low below 59,000. Currently it is at 60,822.
Bitcoin (BTC-USD) reached $7B this week, and yesterday’s rally was compared to its all-time high record of almost 69,000 in November 2021, with some investors arguing that this rally would represent the start of a new bull market for crypto.
According to Glassnode data, more than half of all Bitcoin tokens in circulation have not moved in more than two years, but fears of the coin’s lack of supply available for purchase could be overblown, with short-term holders offloading their positions, said Stephane Ouellette, chief executive of digital-asset platform FRNT Financial.
“We have a long way to go between now and when we get to a full bull market,” she said; “but it does seem like this concern that the market will break due to a liquidity crisis is not necessarily the case.”
The profit margin of short-term Bitcoin holders was around 45%, according to data from CryptoQuant.
Any ranking above 40% could signal a potential price correction on its way, the firm said. “Historically, when the cost of opening new long positions becomes too high, Bitcoin (BTC-USD) prices tend to pause or experience a correction.”