Galaxy Digital CEO Michael Novogratz says he wouldn’t be surprised to see some corrections and consolidation in the crypto market before taking off to the new high.

In a recent interview with Bloomberg, Galaxy Digital CEO Michael Novogratz highlighted the need for vigilance when dealing with Bitcoin (BTC) at present, indicating a possibility of short-term shifts in its trajectory.

Expressing his concerns on the matter, Novogratz said he “wouldn’t be surprised to see some corrections and some consolidation.”

“If it [Bitcoin] corrects, it might correct to the mid-$50,000s, before taking off to the new high.”

Michael Novogratz

Novogratz characterized the ongoing market rally as a phase of “price discovery,” attributing it to the introduction of spot Bitcoin exchange-traded funds (ETFs), which have attracted a wave of new investors and traders. At the time of writing, BTC has surged over 40% since the beginning of the year, breaching the $60,000 mark on Feb. 28.

Drawing comparisons to the 2021 cycle, Novogratz noted that while institutional players now hold less leverage, retail traders are heavily leveraged, largely due to offerings from offshore crypto exchanges.

“I think the market is too leveraged right now. There will be a washout. People can’t sustain this much leverage.”

Michael Novogratz

Despite these concerns, Novogratz maintains a positive outlook for the crypto market, anticipating that spot Ethereum ETFs could receive approval from the U.S. Securities and Exchange Commission later this year. Galaxy Digital, in collaboration with Invesco, is among the entities seeking to offer an Ethereum ETF.