June 24, 2021

This Is Why It Could Be Dangerous To Be Short In Bitcoin And DOGE

3 min read

With significant cryptocurrencies bleeding out in the past day, fear seems to be taking control of the marketplace. Nevertheless, the CEO of Galaxy Digital and Bitcoin Bull Mike Novogratz is optimistic for the medium and long term. In an interview for CNBC, Novogratz discussed the threat of being brief Dogecoin, BTC, and made some predictions on their prices.

Up 314.9% in the 30-day chart and 24% over the week, DOGE is an asset hold by those on the “exact same movement” that offered GameStop (GME) stocks a fresh drive. Led by the subreddit r/Wallstreetbets, GME’s relentless rally positioned some Wall Street huge gamers on the other side of a bad trade. Novogratz believes DOGE is fuel by a similar excitement. Galaxy Digital CEO said:

Dogecoin talks to a great deal of the same movement that GameStop did. There is a type of crazy enjoyment around very young financiers, around meme coins and meme ideas. It’s stunning to me that GameStop continues to hold any value … Dogecoin is even more unusual in that regard.

Novogratz included that rate of interest at 0%, a portion used by banks and other entities to determine the amount to be charged on a loan, works as a driver for the DOGE or Gamestop fad. As financiers desperately search for properties capable of supplying them with yield.

Dogecoin has drawbacks, as a large quantity of its supply hold by single entities, stated Novogratz. Adding that he personally would not purchase the cryptocurrency, he acknowledged the capacity for it to provide prospective gains:

I’ve been wrong about DOGE. I’ve told people over and over that I would not be long it … But it’s that same energy. Retail has the bit in between its teeth in great deals of methods. They’re not quiting on GameStop, they’re not giving up on Dogecoin today so unsafe to be brief, wouldn’t be long.

Coinbase Effect Lingers And Impacts Bitcoin (BTC)

Bitcoin has actually been acting as a store of value for the past 12 years, Novogratz stated. BTC’s price might move in around $50,000, $55,000, and higher ranges on this level in a debt consolidation phase. Novogratz anticipates this could BTC enough momentum to go after a brand-new all-time high.

The high volatility in Bitcoin’s performance is in some way connected to DOGE’s, as the crypto market is still driven by retail financiers. Last week throughout Coinbase (COIN) debut in Nasdaq, much of these investors took take advantage of positions and were liquidated. Novogratz stated:

Leverage got excessive; individuals got excited. We saw on Friday night there were a couple stories and we wipe out one million separate accounts of leverage purchasers of crypto that got secured. They got shut down and that took about 8-9 billion of market cap out of the system. In the long run, that’s a good thing (…).

Bitcoin is trading at $49.142,06 with a 9.5% loss in the day-to-day chart. In the weekly and regular monthly chart, BTC is down 21.7% and 9.3%, respectively.

Bitcoin BTC BTCUSD
BTC on a correction trajectory in the day-to-day chart. Source: BTCUSD Tradingview