The recent 12% pullback in Bitcoin is a “necessary market cleansing,” and the price will surpass $60,000, though it will not stabilize above $70,000 by the end of August, according to former BitMEX CEO Arthur Hayes.
“Mayday” is a brief discussion on the recent Fed, US Treasury, the bank bailout policies. It’s money printing disguised. As such, I’m re-entering the market with super shitty shitcoins.
The Hat Stays On!https://t.co/XmBpQqzBx9 pic.twitter.com/1SkIqZm5xk
— Arthur Hayes (@CryptoHayes) May 2, 2024
The expert noted that April’s dynamics matched his expectations. Hayes had previously predicted a Bitcoin drop following the halving, which occurred on April 20.
He attributed the market downturn to profit-taking after the reward reduction, alongside other factors such as the US tax season, concerns over the Fed’s decisions, and a slowdown in ETF inflows.
According to Hayes, a return to growth is possible due to an increase in dollar liquidity.
This will be driven by a combination of:
- a reduction in the pace of bond sales by the Federal Reserve;
- payments by central banks on bank reserves and reverse repo operations;
- interest income from US Treasury securities.
By reducing QT monthly from $95 billion to $60 billion, the Fed effectively injects more liquidity ($35 billion) into the markets, which could theoretically flow into riskier assets like Bitcoin. Hayes described this as “hidden money printing.”
“The slow addition of billions of dollars in liquidity each month will curb negative price movements from now on,” he explained.
In conclusion, Hayes noted that the market will spend the summer assessing the impact of recent US monetary policy statements on inflation.
Jeff Ross, founder and CEO of Vailshire Capital Management, expressed a similar view. In his opinion, the Fed’s “rhetorical pivot” marked an official transition from “bad to less bad” liquidity conditions.
Lot’s of #bitcoin doom and gloom out there again today.
You do you, but I’m still respecting the ongoing bullcrab market.
The FOMC rhetoric pivot yesterday (which begins on June 1st) was the official transition from bad-to-less-bad liquidity conditions, IMHO.
As an aside,… pic.twitter.com/2HY0nWuW43
— Dr. Jeff Ross (@VailshireCap) May 2, 2024
“Traders calling for the end of the Bitcoin bull market may be disappointed to learn that it hasn’t even started yet. I believe the coming weeks and months are the last chance to buy cheaply,” he commented.
Earlier, Bitfinex’s head of derivatives, Jag Kooner, identified signs of the market transitioning to a summer lull.
Previously, trader Gordon Grant pointed to a decline in confidence in the growth of Bitcoin and Ethereum.