Arthur Hayes, co-founder of BitMEX and experienced crypto market analyst, shares his insights on upcoming changes in Bitcoin’s price. His analysis, based on a deep understanding of the market and several key variables, paints a picture of a possible scenario for the world’s most popular cryptocurrency.
Arthur Hayes, known for his precise analyses and extensive knowledge of cryptocurrencies, predicts that early March will bring a significant price correction in Bitcoin, possibly up to 40%. Key factors highlighted by Hayes include the possible introduction of Bitcoin-based ETFs in the USA, which could push its price above $60,000. Hayes links the potential correction to a sudden outflow of dollar liquidity, leading him to be cautious about buying Bitcoin before key dates in March.
Hayes points to three important variables that may impact the crypto market in March. The first is a decrease in the balance of the Reverse Repurchase Agreement (RRP) program. Monitoring the RRP balance, according to Hayes, can signal an upcoming market downturn. The second variable is the decision to renew the Bank Term Funding Program (BTFP) on March 12th, which will significantly impact banks seeking cash in exchange for U.S. Treasury bonds.
The third element mentioned by Hayes is the potential interest rate cut by the Federal Reserve during its March meeting. This would be the first such reduction since 2021, potentially affecting market predictions about future dollar liquidity.
Hayes emphasizes the interconnections of these variables and their sequence as key to shaping market perception. He advises assigning probabilities to different scenarios and anticipating market reactions, recommending caution in taking additional risks during this period.
Confident in his trading skills, Hayes plans to capitalize on the upcoming correction, trying to “catch the peak” of the market at the end of February. He intends to buy put options with an expiration date of June 28th to hedge against potential decline. By choosing a longer expiration date, he aims to mitigate the impact of premium degradation while increasing transaction management flexibility.
Despite short-term caution, Hayes maintains an optimistic long-term outlook on Bitcoin, expecting market conditions to normalize by the end of March. Bitcoin’s current price, standing at $43,952, has already seen some rebound after a recent drop, driven by speculations about the potential approval of a Bitcoin ETF.
It’s noteworthy that Hayes’ predictions are echoed in the forecasts of other market participants, such as QCP Capital analysts, who predict a significant correction to $36,000 after the approval of a Bitcoin ETF. Popular crypto analyst Will Clemente also noted that corrections are natural following significant price increases, forming a stronger basis for future upward movements.
In light of these forecasts and analyses, cryptocurrency investors and enthusiasts should brace themselves for dynamic and unpredictable weeks. Close market monitoring, considering the variables indicated by Hayes, may be crucial for understanding and capitalizing on the upcoming price changes in Bitcoin.
Photo by Chris Liverani on Unsplash
