Galaxy CEO Mike Novogratz Says A Turn In Alibaba Could Signal Bitcoin Has Bottomed

Regarding Strategy, Novogratz noted that Michael Saylor has sufficient cash to cover dividends and is not a forced seller amid market challenges.

• Mike Novogratz indicated a strong correlation between Bitcoin and Alibaba, suggesting a potential bounce in Alibaba could signal that Bitcoin has bottomed.
• He emphasized the importance of Bitcoin holding the $59,000 to $60,000 range for market stabilization, and a break below could lead to a decline to $45,000.
• Novogratz attributed Bitcoin's weakness to monetary policy but suggested a market shift towards anticipating rate cuts as geopolitical tensions ease.

Galaxy Digital (GLXY) CEO Mike Novogratz said on Saturday that he sees a strong correlation between Bitcoin (BTC) and Alibaba (BABA), with what he called a bounce in the Chinese company potentially signaling that the cryptocurrency has bottomed.

On his podcast “All Things Markets” with Anthony Scaramucci, Novogratz said Chinese consumers and investors weren’t buying crypto and were also staying away from their own domestic stocks. If that buyer comes back and Alibaba goes higher, that would be "one thing to check" for a Bitcoin recovery, he said.

Novogratz said he was caught in a value trap holding Alibaba, calling it a cheap stock that fell almost every day. “I wish I had compared the Alibaba chart and the Bitcoin chart before I bought it,” he said.

He said the current level was critical for Bitcoin. He said a hold in the roughly $59,000 to $60,000 area would give the market some relief, calling that "stunningly important." A break, he added, would open the door to $45,000.  

The Gold And Bitcoin Drawdown

Novogratz gave even odds that Bitcoin would reach $45,000 before $85,000, and said that a move to around $55,000 next week would be a sign of lower prices to come, while a level near $62,000 would be a sign the support had held.

Novogratz said that both gold and Bitcoin are in bear markets, with Bitcoin down about 50% from its high and gold off about 45%. He said the two assets would probably correlate at some point. Part of Bitcoin’s weakness was due to monetary policy, he said, but he suggested markets could shift toward pricing rate cuts later in the year rather than hikes as the war wound down and oil prices eased. 

GLXY’s stock closed at $29, up over 3% on Friday’s close. On Stocktwits, retail sentiment around GLXY remained in the ‘bearish’ zone, while chatter stayed at ‘low’ levels over the past day.

Saylor Will Keep Afloat 

On Strategy (MSTR), Novogratz said the “Saylor thing is real,” and the company had lost market confidence with its preferred securities trading poorly. But Novogratz stressed that Michael Saylor was not a forced seller of Bitcoin or his own stock and had enough cash to cover dividends and wait, even as the market looked to challenge him. 

Novogratz’s comments come as Strategy faces heightened legal scrutiny. The Rosen Law Firm said it was investigating potential securities class action claims on behalf of Strategy’s investors to determine whether the company may have issued materially misleading information to the investing public. 

The investigation covers holders of MSTR common stock, as well as its preferred securities, all of which have been pummeled as Bitcoin’s descent has exacerbated investor losses. The firm has not filed suit, and the inquiry is still in the investigation stage.

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