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The crypto market has performed worse in recent weeks than we are used to. While we still had a new all-time high (ATH) in March bitcoin (BTC), the price is approximately 16% lower at the time of writing. If it were up to the former CEO of crypto exchange BitMEX isArthur Hayes, we don’t have to worry.
Hayes believes bitcoin has reached its local low and will slowly rise in the coming months. He sees the recent market downturn as a much-needed “cleanse.” The ex-CEO predicts a rebound above $60,000, which is what we see happening at the moment, followed by a period where the price will fluctuate between $60,000 and $70,000.
Bitcoin & Ethereum rise depends on US policy, analysts say
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3 causes behind the decline
Hayes attributes the recent decline to several factors. One reason is the tax season in the United States (US). During tax season, many investors sell their assets to pay taxes or offset losses with gains. This could lead to increased selling pressure on the market, including BTC.
The ex-CEO also points to the “sell the news” effect that took place after the halving. This refers to the phenomenon of investors selling their positions after an expected event or announcement has occurred.
Finally, Hayes also sees slowed inflows into bitcoin exchange-traded funds (ETFs) as a reason for the recent decline.
Why the BTC price will rise again
After the recent selling pressure, Arthur believes BTC will slowly rise again, partly thanks to the increase in dollar liquidity. This could be related to the quantitative tightening policy of the Federal Reserve (FED). This involves the central bank reducing the money supply in the economy by selling assets or raising interest rates.
The US Treasury Department’s plans for debt issuance are also bullish for bitcoin. This involves the government borrowing money from investors by issuing bonds, with investors receiving a return in exchange for providing financing to the government.
Hayes sees these measures as a form of ‘secret money printing’, which would be positive for risky assets. He predicts that prices will stabilize, consolidate, and eventually slowly rise and stabilize around a price of $70,000 in the coming months.
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