Bitcoin price dropped 15% in the last two weeks but may have already reached a bottom, according to BitMEX's Arthur Hayes.
Hayes blames the market crash on taxes, stagnant interest rates, and the recent lack of interest in the spot Bitcoin ETFs.
Arthur Hayes also believes Bitcoin is ready for a slow upward climb from now until August.
Analyst Michael van de Poppe says Bitcoin is going strong, and that investors should consider longs
Mid-April until the start of May was particularly rough for the crypto industry.
We had especially harsh liquidations between 12 and 13 April, with nearly a billion liquidated across the board—each—on both days.
The crypto market’s liquidations
Bitcoin and the rest of the crypto market have traded sideways since then, occasionally showing up and kicking bulls off the market without warning.
At the time of writing, Bitcoin has declined by around 15% in the last two weeks.
However, so far, it appears the bloodbath over the last few weeks might be coming to an end.
According to former BitMEX CEO, Arthur Hayes, the $56,550 zone is “the bottom”, and Bitcoin is set to trend upwards and start the new bull market from here.
According to a new blog post authored by Hayes, what the market is currently going through is a “well-needed market cleansing.”
By “cleansing”, Hayes refers to the necessary corrections and consolidations that come after periods of massive bullish action.
Hayes opined that Bitcoin may have now reached a local bottom from here, setting the stage for what he calls a ”bottom, chop, and […] a slow grind higher”
The hat stays on
Hayes claims that Bitcoin has reached a local bottom, setting the stage for a gradual recovery.
Moreover, he expects this “slow grind” to push Bitcoin back up again above the $60,000 mark, before a consolidation between $60,000 and $70,000 that lasts from now until August.
Hayes blames the recent market crash on several factors including the tax season in the US, the FED’s decision to keep interest rates stagnant, the recent halving (and the dips that typically come after), as well as the recent lack of interest in the spot ETFs.
So far, Bitcoin has crashed by around 23% from the all-time high it made in mid-March, which is the fourth correction of its kind over the last year.
Hayes sees these crashes as "necessary", and expects this "slow grind" to happen based on several factors like the increased liquidity on the US dollar from the FED's quantitative tightening (QT), as well as the U.S. Treasury's debt issuance plans.
This liquidity injection into the market by the FED is set to push investors towards riskier assets (like Bitcoin and even stocks), thereby raising the prices.
Hayes calls this setup a “stealth form of money printing”.
Hayes isn’t alone when it comes to his outlook on Bitcoin.
According to analyst, Michael van de Poppe in a recent tweet, the FED is “casually” starting to unwind Treasury buybacks, and is reducing quantitative tightening.
Because of this, more pressure gets applied to the US economy (and therefore the dollar), meaning that a recession comes further and further into view.
To this end, Bitcoin is in one of its strongest phases, and the analyst opines: “Long Bitcoin, QE is close”
Long Bitcoin
At the time of writing, Bitcoin currently trades at around $59,832 and is seriously about to break through the $60,000 mark once again with a 2.82% price increase over the last day.
However, the cryptocurrency is still nearly 20% down from the all-time high of $73,800.
Despite the bearishness in the short term though, the ongoing difficulties the US economy (as well as the dollar) is going through, is heaping bullish sentiment on the pioneer cryptocurrency.
Bitcoin looks poised to continue further upwards from here and even hit the $70,000 zone pretty easily from here if the bulls continue to push further against the bears.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.