Galaxy Digital CEO Mike Novogratz thinks Bitcoin’s price action is in for a lengthy sleeper period until the market “narrative” can rear its head.

That narrative can come in one of two forms: either the central bank cuts interest rates, or regulators clear the air on crypto.

Bitcoin Needs A New Narrative

During a company earnings call on Tuesday, Novogratz said he believes crypto is in a “consolidation phase” after a strong first quarter, and he expects Bitcoin’s price to float between $55,000 and $75,000 until “the next set of market events brings us higher.”

“Bitcoin always needs a narrative,” elaborated Novogratz during an interview with Bloomberg on Tuesday. “If you think of Bitcoin as digital gold, there’s always two narratives: one is the macro, and two is adoption.”

Bitcoin’s price has historically been influenced by global macroeconomic trends, rising during periods of dovish central bank policy, and falling during hawkish periods.

At the start of the month, Bitcoin dropped below $57,000 on fears that the Federal Reserve would signal a more extended period of high interest rates at its upcoming FOMC meeting. While that turned out to be true, the coin recovered after the meeting as the central bank simultaneously promised to slow its pace of quantitative tightening, which is a boon for market liquidity.

The Fed and the Regulators

Until macroeconomic data shifts and inflation begins to come down, Novogratz believes the Fed is “on hold,” and so is Bitcoin.

“Until you see that movement in short-term rates both here and abroad, and/or more regulatory clarity, Bitcoin probably trades in a range,” he predicted.

Bitcoins 50% climb in the first quarter was largely driven by excitement over the newly launched Bitcoin spot ETFs. The funds have suffered net outflows in Q2, however.

Both the Bitcoin halving and launch of the Runes token standard also took place last month, leaving two more narratives behind the leading crypto asset.

Regarding regulatory clarity, Novogratz doesn’t think its coming for crypto until after the U.S. federal election this fall.

As things stand, crypto has become a partisan issue in the United States, with the Biden administration favoring stricter guardrails on the industry. At the same time, Republicans seek a more welcoming approach to foster financial innovation.