Arthur Hayes Closes Bitcoin Short, Predicts Potential Rally Next Week
Arthur Hayes, the former CEO of BitMEX cryptocurrency exchange, has recently closed his Bitcoin short position after predicting a deep correction. Earlier, on September 6, he warned that Bitcoin could drop below the $50,000 mark, a psychological threshold, and took a short position accordingly. However, in a recent update, Hayes announced that he closed his short position with a 3% profit and suggested a potential Bitcoin rally might be on the horizon.
Bitcoin Price Could Rally on US Money Printing
The prospect of more liquidity injections by the Federal Reserve (Fed) is expected to foster a positive sentiment among crypto investors, potentially boosting Bitcoin’s price. On September 7, Hayes noted the possibility of increased money printing by the US government, suggesting this could lead to a Bitcoin rally.
Image Source: Cointelegraph
Liquidity Injection Prediction:
Hayes’ prediction aligns with the views of other experts in the field. For instance, Jamie Coutts, chief crypto analyst at Realvision, has articulated that the M2 money supply, encompassing all cash and short-term bank deposits in the US, could be pivotal for the next Bitcoin surge.
Jamie Coutts’ May 16 Tweet:
“This is due to a high correlation with $BTC bull cycles. Of the big 3 I track in my Bitcoin/Liquidity framework, Global M2 appears to capture the most of the moves.”
Image Source: fred.stlouisefed.org
It’s noteworthy that the rate of change in the money supply is more crucial than the nominal value, as highlighted by Coutts, who emphasized that Bitcoin usually trends with shifts in M2 momentum.
Bitcoin’s September Correction In Line With Bull Halving Cycle: Analyst
Investor sentiment dipped drastically this week due to concerns about Bitcoin potentially falling below $50,000, leading to extreme fear in the crypto market. Nonetheless, historical trends indicate that Bitcoin’s September performance follows predictable patterns akin to previous halving cycles.
Rekt Capital’s September 6 Tweet:
“When BTC retraced -7% in September in 2021. BTC rallied +39% in the following October. Bitcoin is currently down -9% this September.”
Image Source: Rekt Capital
September has traditionally been a month of heightened volatility for Bitcoin. Data from CoinGlass shows an average return of -4.69%, making it the most bearish month on record.
External Link: CoinGlass Data
FAQs
What is Arthur Hayes’ current stance on Bitcoin?
Arthur Hayes has closed his short position on Bitcoin with a 3% profit and expects a potential rally due to increased US dollar liquidity.
Why is the M2 money supply essential for Bitcoin?
The M2 money supply tracks all cash and short-term bank deposits in the US. Its changes often correlate with Bitcoin’s price movements, making it a significant indicator for potential rallies.
Why is September usually a volatile month for Bitcoin?
September historically shows a -4.69% return on average for Bitcoin, marked by frequent corrections. This aligns with previous Bitcoin halving cycles, often leading to improved performances in subsequent months.
Conclusion
While initial fears drove Bitcoin investors into a state of extreme caution, the subsequent actions and predictions of influential figures like Arthur Hayes reintroduce a sense of optimism. With the anticipation of increased liquidity injections by the Fed and historical trends suggesting potential upside, the market could very well witness a Bitcoin rally soon. As always, investors should stay informed and consider all economic indicators and expert analyses before making investment decisions.
Magazine:
Arthur Hayes’ ‘sub $50K’ Bitcoin call, Mt. Gox CEO’s new exchange, and more: Hodler’s Digest, Sept. 1 – 7