Bitcoin recently saw a drop below $56,000, signaling a continuation of its downtrend. Arthur Hayes, co-founder and former CEO of BitMEX, predicts a worst-case scenario where Bitcoin could fall to $50,000. This bearish outlook is also extended to altcoins, which may experience even steeper losses according to Hayes.
Hayes bases his predictions on the broader macroeconomic environment, particularly focusing on the actions of the Federal Reserve and dynamics in the US Treasury market. The recent pause in rate hikes by the Fed, combined with the increase in 10-year Treasury bond yields towards 5%, has raised concerns over inflation and government spending.
Despite the negative forecast, Hayes remains long on BTC and certain altcoins, suggesting that liquidity injections could potentially stabilize the markets and boost Bitcoin’s price. He plans to increase his positions in reliable altcoins at discounted prices while avoiding leveraged positions.
Hayes maintains a long-term thesis that central banks will resort to money printing to address economic challenges, potentially benefiting Bitcoin and other risk assets. He also alludes to the seasonal trend where October historically shows the strongest bullish seasonality for Bitcoin with an average gain of 22.9%.
While Hayes presents a bearish outlook for the short-term market movements based on macroeconomic factors and market conditions, he remains optimistic about the long-term prospects of Bitcoin and certain altcoins. The seasonal trend in October could provide an opportunity for traders to accumulate during the September dip and take profits towards the year-end.
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