Arthur Hayes, co-founder of BitMEX, believes that Bitcoin (BTC) could experience further declines, despite having already undergone a 24% correction from its all-time high.
In a recent post on the social platform X, the crypto expert highlights a sequence of events he believes may pressure the Federal Reserve to change its stance and conclude its restrictive monetary policies.
Hayes anticipates that Bitcoin may tumble along with the US stock market, but he asserts that these developments alone will not be sufficient to prompt Fed intervention. The CIO of Maelstrom suggests that the failure of traditional financial firms in the US would compel the Fed to halt quantitative tightening (QT) – a shift that could lead other significant central banks to follow suit.
“BTC is likely to find a bottom around $70,000. A 36% pullback from the $110,000 all-time high is quite typical for a bull market.
Next, we require stonks, with SPX (S&P 500) and NDX (Nasdaq Index), to plummet. We also need some TradFi entities to collapse.
ONLY THEN will we see the Fed, PBOC (People’s Bank of China), ECB (European Central Bank), and BOJ (Bank of Japan) all easing to revitalize their economies.
THEN, it’s time to stock up.
Traders will attempt to buy the dip; however, if you are more risk-averse, wait for the central banks to ease before deploying additional capital. While you might not catch the exact bottom, you’ll avoid the mental anguish of enduring a prolonged period of stagnation and potential unrealized losses.”
According to Hayes, once Bitcoin approaches his downside price target, it is likely to experience significant price fluctuations due to the large volume of outstanding derivative contracts, or open interest (OI), in the low $70,000 range.
“There is a considerable amount of options OI focused on the $70,000-$75,000 range; if we reach that level, it will be tumultuous.”
As of now, Bitcoin is trading at $82,780, having increased nearly 5% over the past day.
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Disclaimer: The opinions expressed at The Daily Hodl are not investment advice. Investors should perform their own due diligence before engaging in high-risk investments in Bitcoin, cryptocurrency, or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses incurred are your responsibility. The Daily Hodl does not endorse the buying or selling of any cryptocurrencies or digital assets, nor does it act as an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
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