Meanwhile, the US dollar is sliding, working on hitting fresh lows for the year, after Dallas Federal Reserve President Robert Kaplan reiterated that he does not expect rates to increase until next year, meaning US monetary policy will remain easy.
Bitcoin is likely to not be out of the woods yet, as the price continues to remain under $50,000.After crashing to just under $42,150, a level that was last seen in early February, traders are not ruling out $38,000 for now, which is seen as a good buy the dip opportunity. According to Michael Novogratz, chief executive officer of Galaxy Digital, Bitcoin (BTC) will take its time to rally again.“I think we are going to consolidate for a while, four to six weeks,” said Novogratz in an interview, calling a $40k – $50k price range fair. Much like Bitcoin, he expects the “consolidation” period for Ether to be between $2,800 and $4,000.
However, with funding rates on Ether perpetual contracts gaining momentum suggesting the reentry of speculators in the market, trader Loomdart sees “longing GBTC at like 30% discount and smashing long on BTC when its covariance,” as the next big trade. ETH 0.06%Ethereum / USDETHUSD$ 3,366.96$2.020.06%Volume42.33 bChange$2.02Open$3,366.96Circulating115.93 mMarket Cap390.32 b28 minIOHK Unveils ERC-20 Converter Tool for Testnet, Allowing Ethereum Tokens to Migrate to Cardano2 hCrypto Investment Firm Valour Unveils Cardano (ADA) and Polkadot (DOT) Exchange-Traded Products (ETPs)3 hOnly 1% of Ethereum Addresses Are Currently Using DeFi: ConsenSys Report“Spot determines BTCs final price. Leverage just determines the path it takes to get there. You think some fund is gonna nuke all the spot BTC they bought because “energy bad”? Fairly confident we go to ATH after these charades,” he added.Once-in-a-generational shiftWhen it comes to Tesla CEO Elon Musk voicing his concerns regarding Bitcoin’s energy consumption on Twitter while making many uneducated comments, Novogratz said he takes Musk’s “mining comments at face value.”“I don’t think that’s Bitcoin-specific, that’s everything specific: The gold market, YouTube — all uses a lot of electricity. And Elon has businesses in clean energy.” “Let’s not miss the big picture for the small picture,” Novogratz said.“We are going through a once-in-a-generational shift in this crypto blockchain evolution, where the financial infrastructure is starting to be rebuilt. That process is picking momentum.”And that’s why Novogratz expects Bitcoin to finish the year higher. As we reported, Tom Lee of Fundstrat actually increased his BTC price prediction from $100k to $125,000 by the end of the year as Bitcoin’s energy consumption debate heats up.According to Novogratz, the next catalyst will be the US Securities and Exchange Commission (SEC) approving a Bitcoin Exchange-Traded Fund (ETF) that he expects either at the end of this or early next year.“My guess is the next catalyst is the ETF.”Dollar Down, Gold UpWhile BTC struggles to find its way, the traditional safe haven has taken this as a chance to rally to $1,870 per ounce. Gold bottomed at around $1,674 in March, a level last seen in June 2020 and since then has pumped to late January 2021 levels.“When two fight, there’s often a third who will profit,” wrote analyst Mati Greenspan in his Monday newsletter Quantum Economics.“In this case, it makes perfect sense. Bitcoin has been stealing the limelight from gold throughout this entire round of overenthusiastic fiscal and monetary stimulus. So now that bitcoin is in question and crypto influencers are busy with infighting, the traditional store of value slash inflation hedge is making a comeback.” While the precious metal is finally showing some strength, the US dollar is not feeling the same. The USD Index’s movement actually coincides with that of gold as it has been on a downtrend since late March.Today, the USD Index fell to 89.754, working on hitting fresh lows for the year, which was set at 89.2 in the first week of January, last seen around March 2018.This slide in the dollar has been amidst the renewed expectation that the US won’t hike interest rates anytime soon after Dallas Federal Reserve President Robert Kaplan reiterated on Monday that he does not expect rates to increase until next year.Capped yields reflect that US monetary policy will remain easy, putting downward pressure on the dollar and inflating prices across the broad asset class.