Cryptocurrency Market Outlook: Mid-March Peak Predicted
Whales Accumulate Bitcoin
According to a recent article by BitMEX co-founder Arthur Hayes, the cryptocurrency market is expected to peak in mid-March 2025. Hayes’ prediction is based on an analysis of the U.S. dollar liquidity environment in the first quarter of 2025 and its potential impact on the crypto market.
U.S. Dollar Liquidity Environment: A Key Factor
Hayes points out that the decline in the balance of the Federal Reserve’s Reverse Repurchase Facility (RRP) and the release of funds from the Treasury General Account (TGA) are expected to inject approximately $612 billion in liquidity into the market in the first quarter. This influx of liquidity is likely to support Bitcoin and other assets, driving up prices.
Quantitative Tightening and Debt Ceiling Concerns
However, the Fed’s quantitative tightening (QT) is expected to reduce liquidity by approximately $180 billion, which could have a negative impact on the market. Additionally, the debt ceiling issue may trigger a liquidity shift in the second quarter. The Treasury may need to raise the debt ceiling by May or June, which could further suppress market liquidity.
Peak Tax Periods and Market Adjustment
Peak tax periods, such as mid-April, are also expected to reduce market liquidity. Despite the presence of various macroeconomic variables, the impact of RRP and TGA capital flows on the market is relatively clear. Hayes predicts that the market will reach a short-term high at the end of the first quarter and may enter a period of adjustment thereafter.
Conclusion
In conclusion, the cryptocurrency market is expected to peak in mid-March 2025, driven by an influx of liquidity from the decline in RRP and TGA balances. However, quantitative tightening and debt ceiling concerns may lead to a market adjustment in the second quarter. Investors should be aware of these factors and their potential impact on the market.
Source: M.theblockbeats.info
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