Arthur Hayes predicts that Bitcoin could bottom at $70K before rebounding, arguing that such a significant drop is normal for a bull market.
Bitcoin (BTC) is trading at $80,105.76, marking a slight 0.3% increase over the past hour. However, it has dropped 2.7% in the last 24 hours and 4.0% over the past week. Meanwhile, Bitcoin remains 26.37% below its all-time high of $109,786 after falling below $77,000 on Monday.
Bitcoin Price Could Fall to $70K Before Recovering
Amid this downturn, Arthur Hayes, co-founder of BitMEX, tweeted that Bitcoin could reach a bottom of around $70,000. This would represent a 36% correction from its all-time high near $110K.
He views this correction as typical in a bull market. According to Hayes, Bitcoin’s recovery depends on external economic factors, including stock market performance and financial instability within traditional finance.
Hayes believes that Bitcoin could rebound after major stock indices, such as the S&P 500 (SPX) and Nasdaq 100 (NDX), experience a sharp downturn. He suggested that a financial institution’s collapse could further accelerate market movements.
Once central banks, including the Federal Reserve (Fed), European Central Bank (ECB), People’s Bank of China (PBOC), and Bank of Japan (BOJ), shift toward easing policies, he anticipates Bitcoin’s resurgence.
Meanwhile, he warned that traders seeking to buy the dip may experience extended sideways movement and unrealized losses if they act too soon.
Market Signals Point to Potential Volatility
Previously, Hayes forecasted Bitcoin declining to $75,000. He cautioned that a larger downturn might be imminent, citing a surge in open interest volume on options contracts around the $70,000-$75,000 range.
He noted that if Bitcoin retests $78,000 and fails to hold, $75,000 could become the next key level. Furthermore, entering the $70,000-$75,000 range could trigger increased volatility due to the significant number of outstanding options contracts at those price levels.
Additionally, in a blog post dated March 4, Hayes highlighted unfavorable macroeconomic conditions as a contributing factor to the downward pressure on cryptocurrencies.
He pointed out that despite U.S. stock market indices hovering near record highs, Bitcoin was signaling an impending liquidity crisis. According to him, growing recession fears could drive a sharp correction in the broader financial market.
How High Can BTC Pump with Economic Policies?
In his blog, Hayes suggested potential policy changes under Donald Trump’s administration could influence Bitcoin’s trajectory. He speculated that Trump’s economic strategy might involve expanding the money supply while lowering borrowing costs.
Hayes argued that current U.S. economic growth is primarily driven by government spending. If Trump reduces government expenditures and cuts federal jobs, a recession could follow due to decreased public spending.
In such a scenario, the Federal Reserve might be forced to lower interest rates and introduce quantitative easing to stabilize the economy. These measures could weaken the U.S. dollar, potentially benefiting Bitcoin.
Looking further ahead, Hayes suggested that if Trump’s policies significantly devalue the dollar, investors may turn to Bitcoin as a store of value. He projected that Bitcoin could reach $250,000 by the end of this year and possibly $1 million before the conclusion of Trump’s presidency.
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.
