Bitcoin crash deepens: Novogratz sees possible bottom while Michael Burry warns of “Death Spiral”

Galaxy Digital founder and CEO Mike Novogratz said in an interview with Bloomberg that Bitcoin may be close to bottoming out soon. This news comes as cryptocurrency markets continue to crash this week, and many investors and analysts fear we are headed into a bear market.

Mike Novogratz said in an interview with Bloomberg this week that there is a likelihood that Bitcoin is getting close to the bottom of this recent crash, although he cannot say for certain.

The Galaxy Digital founder and CEO addressed that a lot of leverage has been taken out of the system, and pessimism is high amongst crypto investors. When discussing how gold and NASDAQ prices continue to climb higher, rates going lower, and the Trump Administration being very pro-crypto, he added that “Bitcoin was not supposed to act like this,” and that “something went wrong.” After being asked by the interviewer about how much pain Novogratz thinks is ahead for crypto markets, he stated that he believes $70,000-$100,000 is the new price range for Bitcoin.

However, Bitcoin broke below $70,000 today and has fallen nearly 8% in the last 24 hours, to a low of roughly $66,700 this morning. Other major cryptocurrencies like Ethereum have hit new lows as well, with ETH breaking below $2,000 today for the first time since March of last year, and Solana hitting a low of $83 for the first time since late 2023. The Fear & Greed Index is currently sitting at 11 out of 100, indicating a sentiment of extreme fear among investors.

John Deaton accuses the banking system of suppressing BTC price

A pro-crypto United States Senate candidate, John Deaton, addressed Mike Novogratz’s comments about the current state of cryptocurrency markets in a post on X yesterday. Deaton stated that Novogratz is right about his claims, writing that “the math isn’t mathing” regarding Bitcoin’s current price. He went on to state that when gold is hitting all-time highs, and Bitcoin is crashing to new lows, despite the same macro tailwinds and a pro-crypto administration in office, it’s important to turn your eyes to the paper markets. He believes that the same bank playbook is being run on BTC that was used to suppress silver prices in the past. This was done through heavy shorting via futures that suppressed price action despite high physical demand for silver at the time.

Deaton accused the traditional finance players, like the banking system, or what he calls “the old guard,” of using paper contracts to suppress the price of Bitcoin and other cryptocurrencies to shut down the Digital Gold narrative. He finished his recent X post by writing that “the banks are following their political playbook in Washington to slow down or kill crypto legislation while at the same time following their manipulation playbook on the asset itself.” This dynamic is framed by Deaton as a clash between the old guard and what he calls “the new guard,” consisting of crypto players like Coinbase and it’s CEO Brian Armstrong.

Legendary investor Michael Burry warned that Bitcoin is in a “death spiral” and that crypto markets will only continue to worsen as various events trigger further collapse.  For starters, the current crash could lead to a catastrophic sell-off in gold and silver as companies holding BTC try to compensate for losses. This will also push certain BTC miners towards bankruptcy, in his opinion, leading to a further loss in value for the asset.

Unlike Novogratz, Burry does not believe there is a bottom for Bitcoin, as there is no organic use case reason that will be able to slow or stop the death spiral it is currently in. He believes the narrative of Bitcoin as digital gold has collapsed, proving that its price action is based on pure speculation, which leaves it incredibly vulnerable to negative market sentiment.