Arthur Hayes, the co-founder of BitMEX, predicts a rough ride ahead for Bitcoin, even after its recent 24% drop. He believes several factors could trigger a significant market correction.
Bitcoin’s Bottom and the Domino Effect
Hayes envisions a scenario where Bitcoin crashes alongside the US stock market. This downturn, he argues, would lead to the collapse of some traditional finance (TradFi) firms. This chain of events, he says, would force the Federal Reserve, and other major central banks like the People’s Bank of China (PBOC), the European Central Bank (ECB), and the Bank of Japan (BOJ), to ease monetary policies. His prediction? Bitcoin will likely bottom out around $70,000.
He describes this as a “normal” 36% correction from a hypothetical $110,000 all-time high within a bull market. He suggests waiting for central banks to ease policies before investing more heavily. This, he believes, minimizes the risk of significant losses during a prolonged period of sideways price movement.
Expect Volatility Around $70,000
Hayes warns of significant price volatility if Bitcoin approaches his predicted bottom. He points to a large number of outstanding derivative contracts (open interest) concentrated around the $70,000 – $75,000 price range. This high level of open interest suggests that a price movement into this range could trigger significant buying or selling pressure.
Disclaimer
This information is for general knowledge and shouldn’t be considered investment advice. Always do your own research before making any investment decisions, especially in the volatile cryptocurrency market.
