Bitcoin is set for a steep correction, according to BitMEX founder Arthur Hayes.
After Bitcoin‘s impressive run in Q4 2024, many had expected more of the same at the beginning of 2025, especially as the crypto industry’s newly found champion, Donald Trump, was set to take office as President of the United States again.
However, fast forward to the end of January 2025, and the asset’s price action has been choppy at best, save for a brief spark in the run-up to Trump’s inauguration. Now, one industry leader has added to the growing market uncertainty with a significantly bearish short-term outlook.
Bitcoin to $70K?
Bitcoin is set for a steep correction to the $70,000 and $75,000 price range. This is according to BitMEX founder Arthur Hayes.
Hayes shared this view in an X post on Monday, January 27, noting that an analysis outlining the reason for this downturn will come in a Tuesday blog post.
Meanwhile, the analyst remains bullish overall for the year as he predicted that a “mini financial crisis” would trigger a resumption of quantitative easing, which would send Bitcoin to new highs of $250,000 by year-end.
Unsurprisingly, Hayes’ prediction has sparked a flurry of reactions, with most choosing to deride him for not always being accurate.
“I love his writing style and read all his essays but they have been far from accurate,” Apollo Crypto Head of Research Pratik Kala commented, surmising the prevailing sentiment.
Despite these views, Hayes has had some success in the past year, first with his prediction of Bitcoin’s run-up to all-time highs in March 2024 and second with his call of a September 2024 rebound after a slow grind to the $50,000 price point.
Equities Trouble?
While Hayes has yet to elaborate on the reasoning behind his recent call, it comes as some are predicting possible trouble in the U.S. equities market, especially tech stocks, with which Bitcoin has historically been strongly correlated.
These predictions come as DeepSeek, a Chinese large language model, showing up, rivaling OpenAI’s ChatGPT while using only about 5% of the cost. This essentially suggests a possible overvaluation of the U.S.’s much-ballyhooed AI sector.
Indeed, The Kobeissi Letter argued early on Monday that the U.S. stock market was on track to erase $1 trillion in market value as stocks of firms like Nvidia and AMD show steep pre-market losses.
Chip Stocks Overnight Reaction to DeepSeek:
1. Arm, $ARM: -5.5%
2. Nvidia, $NVDA: -5.3%
3. Broadcom, $AVGO: -4.9%
4. Super Micro, $SMCI: -4.6%
5. Taiwan Semi, $TSM: -4.5%
6. Micron, $MU: -4.3%
7. Qualcomm, $QCOM: -2.8%
8. AMD, $AMD: -2.5%
9. Intel, $INTC: -2.0%US markets are…
— The Kobeissi Letter (@KobeissiLetter) January 27, 2025
Perhaps foreshadowing this move, Bitcoin has started the week with a sharp 5% correction from a high of $105,000 to trade just slightly above the $100,000 price point at the time of writing.
The asset’s price also appears to be forming a bearish double-top chart pattern on its daily candle chart with a potential neckline just below $92,000. Still, this formation could also morph into a months-long range.
A key factor that could impact Bitcoin’s short-term outlook is the outcome of the Federal Open Market Committee (FOMC) meeting slated for Wednesday, January 29.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
