Former BitMEX chief executive Arthur Hayes believes Bitcoin has hit a local bottom and will slowly grind back up over the next few months.
In a blog post on May 3, Hayes commented on the recent market slump claiming that “The price action played out as I expected.”
Bitcoin hit a local low of around $58,600 earlier this week but will rally to above $60,000 and then remain rangebound between $60,000 and $70,000 until August, he said.
Hayes added that the 12% Bitcoin retreat this week was a “well-needed market cleansing.”
He blamed it on the tax season in the United States, worry over Federal Reserve decisions, the Bitcoin halving “sell the news event,” and a slowdown of spot Bitcoin ETF asset under management growth.
The 23% correction was the fourth such retrace of similar magnitude over the past 12 months.
Hayes expects crypto markets to slowly grind higher after the recent sell-off, driven by increased dollar liquidity from the Federal Reserve’s quantitative tightening (QT) taper and the U.S. Treasury’s debt issuance plans.
By tapering QT, the central bank is effectively injecting more liquidity into markets which could theoretically make its way into riskier assets such as cryptocurrencies, providing buying pressure.
Hayes views this as “stealth money printing” which is positive for high-risk assets.
“Are the recent Fed and Treasury policy announcements stealth forms of money printing? Yes.”
“The slow addition of billions of dollars of liquidity each month will dampen negative price movement from here on out,” he added before predicting that prices will “bottom, chop, and begin a slow grind higher.”
Sources: TradingView/Cointelegraph
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