According to U.Today, Mike Novogratz, the founder of Galaxy Digital Holdings, has suggested that the cryptocurrency market is currently in a consolidation phase. This phase is often seen as a period of stability following market upswings and is characterized by assets moving within a certain range, indicating a balance between buyers and sellers. Novogratz believes that this is the current phase for cryptocurrencies such as Bitcoin, Ethereum, and Solana, which have experienced significant volatility in recent months.
The consolidation phase could potentially lead to the next bull run, depending on various market factors. Novogratz predicts that Bitcoin, the largest cryptocurrency by market capitalization, may remain in the $55,000 to $75,000 range for now. He stated, 'We are in the consolidation phase in crypto. Bitcoin, Ethereum, and everything else, Solana will consolidate, what does that mean? It means probably somewhere between $55,000 and $75,000 until the next set of circumstances, the next set of market events bring us higher.'
The cryptocurrency market has remained static since the record bull run in the previous two quarters, which was driven by the launch of spot U.S. Bitcoin exchange-traded funds and the Bitcoin halving event. However, Bitcoin fell as confidence about the Federal Reserve's interest rate cuts faded due to consistently strong economic readings. Novogratz noted that the cryptocurrency market experienced many tailwinds in Q4 and Q1, and a cool-off may be likely in the current quarter. This could change in the next quarter if certain factors, such as a reduction in the Fed rate, come into play.
In the most recent indication of the U.S. economic outlook, Fed Chairman Jerome Powell stated that the U.S. economy is functioning well and has a robust labor market. Inflation in the United States did not rise further in the first quarter. While it is uncertain if inflation will continue, Powell hinted that raising interest rates might not be the next step, but they are likely to remain steady.