How Will Bitcoin Move After Dropping to $61,700?

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After hitting $63,000 yesterday, Bitcoin has now corrected to $61,700. Galaxy CEO Mike Novogratz, a prominent industry figure, thinks Bitcoin could range between $55,000 and $75,000 until a “new story” emerges. He suggested that Bitcoin price may not see major fluctuations until the market accepts new changes. According to Novogratz, this “story” could emerge through two scenarios: The US Central Bank reduces interest rates or regulators loosen regulations on cryptocurrencies.

Bitcoin needs a new story

On Tuesday, while discussing the company’s earnings, Novogratz said that after a strong first quarter, cryptocurrencies are now in a consolidation phase and Bitcoin prices could range between $55,000 and $75,000 for until the next market events.

In an interview with Bloomberg on Tuesday, Novogratz shared: “Bitcoin always needs a story. If you consider Bitcoin as digital gold, there are always two main factors: macro factors and adoption factors.”

In terms of Bitcoin’s price history, it is often influenced by macroeconomic trends. Typically, prices rise during periods of loose central bank policy and fall during periods of tightening. Earlier this month, Bitcoin price dropped below $57,000 due to concerns that the Federal Reserve may continue to maintain high interest rates during the upcoming FOMC meeting. Although this was later confirmed, the central bank also pledged to slow down the pace of tightening, which supported market liquidity, helping BTC prices recover after the meeting.

Fed and regulatory agencies

Novogratz said that until there is a change in macroeconomic data and a decrease in inflation, the Fed will “pause,” and Bitcoin will follow this trend. He predicts that Bitcoin will likely trade in a range until short-term interest rates change both domestically and internationally or there is clearer regulation of the cryptocurrency.

Bitcoin’s 50% gain in the first quarter of the year is largely due to excitement from newly launched Bitcoin spot ETFs. However, net capital outflows were recorded in these ETFs in the second quarter of this year.

Last month, two important events created new stories for Bitcoin: the block reward halving and the launch of the Runes token standard. Novogratz also emphasized the importance of regulators, predicting that more clarity on cryptocurrency regulation will emerge after the US federal election this fall.