13.12.202209:21 Forex Analysis & Reviews: Mike Novogratz: BTC unlikely to reach $500,000

On the 4-hour chart, bitcoin broke through the important levels of $18,500 and $17,528. Technically, the price has everything to start a decline. Meanwhile, BTC may be trading within a sideways channel for several months. Currently, it lacks strong fundamentals to cancel the bearish trend. Thus, the flagship cryptocurrency is likely to decline in the near term.

Meanwhile, crypto experts start to change their views on the future of Bitcoin. CEO of Galaxy Digital Michael Novogratz told Bloomberg that his previous forecast was unlikely to come true. Novogratz predicted that Bitcoin would reach $500,000 in 5 years within a strong bullish trend. However, several crashes in the crypto market wrecked all hopes for such growth and BTC plummeted deeper.

Today, the crypto industry may experience a domino effect. After the collapse of FTX, it turns out that many cryptocurrency companies are very closely tied to each other. In other words, one company issues its token, another one buys it, and a third lends it out. Then the first company crashes, the second company has liquidity problems because of the first company's devalued token, and the third company can't get its money back. As a result, many companies have to deal with liquidity problems. It can be solved by taking new loans, issuing bonds, or issuing new tokens. In any case, we are talking about investors' or borrowed funds. However, in order to get a loan, you need to provide all the financial statements, which must be perfect. As the FTX example showed, many people have problems with financial statements, reserves, and the intended use of investor funds.

In general, we believe that the bankruptcies that we have already witnessed will not be the last ones. Now, investors' trust in cryptocurrencies has been abused greatly. When the asset starts to grow again, investors will forget about the undermined trust as they seek easy and fast profit. At the moment, more than half of wallets are suffering losses. Many crypto-billionaires and millionaires have already started to see gains.

On the 4-hour chart, Bitcoin finally broke out of the sideways channel, in which it was hovering for five months. The important levels of $18,500 and $17,582 have been broken through. We may expect the fall to continue with a target of $12,426 in the medium term. The trend lines and channels are no longer relevant and the downtrend persists. Bitcoin is trying to stay afloat but the fundamental background regularly dips it.