BitMEX co-founder Arthur Hayes believes Bitcoin (BTC) is primed to experience a deep drawdown before hitting a new all-time high later in the year.
In a new blog post, Hayes says that the “more likely” path forward for Bitcoin is to drop by up to 32% from the current level before a massive rally.
“I don’t believe this bull cycle is over; however, on a forward-looking probabilistic basis, I think we are more likely to go down to $70,000 to $75,000 Bitcoin and then rise to $250,000 by the end of the year than to continue girding higher with no material pullback.”
Hayes says that after being bullish earlier this year, his “giddiness has evaporated” owing to bearish signals from the macroeconomic environment and the crypto industry.
“Subtle movements between central bank balance sheet levels, the rate of banking credit expansion, the relationship between the US 10-yr treasury/stocks/Bitcoin prices, and the insane Official Trump (TRUMP) memecoin price action produced a pit in my stomach. This is a similar feeling I got in late 2021, right before the bottom fell out of the crypto markets.”
The BitMEX co-founder says that another reason for his change in sentiment is that the rate of increase in money supply in the world’s first, second and fourth-largest economies has decelerated.
“A pullback of this magnitude would be ugly because the current level of bullishness is so high. Trump continues to say the right things via executive orders, improve sentiment by pardoning Ross Ulbricht, and stoke the degen crypto spirits with his recent memecoin launch. But these things were mostly expected, bar the memecoin launch. What is not being fully appreciated is the slowdown in filthy fiat creation in Pax Americana, China, and Japan.”
Bitcoin is trading at $102,555 at time of writing.
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