Bitcoin and Ethereum have already bottomed in the current cycle, but a market reversal should be expected once the the Fed stops raising rates. This was stated by Arthur Hayes, co-founder of the cryptocurrency derivatives exchange BitMEX.
What do big macs, the fed, and #crypto have in common?https://t.co/C0msDGFsDB pic.twitter.com/E8hnPyOtLH
— Arthur Hayes (@CryptoHayes) June 1, 2022
Hayes noted that inflation is having a devastating impact not only on crypto companies but also on players in the tech sector — it drives venture investors to shrink their balance sheets.
The ex-CEO of BitMEX drew attention to the fact that, against the backdrop of the crypto market plunge, the correlation between digital assets and the Nasdaq-100 index has broken down. He also noted that for Bitcoin and Ethereum, each drawdown in the new cycle remains higher than the previous cycle’s peak.
“There may be an exchange trading at a higher or lower intraday level than the one we observe. The point is to be broadly precise and roughly determine the range that can be considered a local bottom. For Bitcoin, that range is $25,000–$27,000. For Ethereum — from $1,700 to $1,800,” Hayes wrote.
In mid-May, Bitcoin slipped below the $27,000 level, Ethereum tested $1,800. In the same month, Bitcoin posted a record nine-week decline.
At the time of writing, Bitcoin was trading near $29,940, Ethereum around $1,820.
Analysts at JPMorgan put Bitcoin’s fair value at around $38,000.
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