Bitcoin (BTC) risks crashing into the $30,000-$35,000 range, says Arthur Hayes, former CEO of crypto exchange BitMEX.
However, according to the analyst, this is not due to the recently approved ETFs, but rather due to the worsening macroeconomic conditions in the world.
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Bitcoin Price Pressure: Rising Inflation Due to Red Sea Conflict
The former BitMEX boss talks about his bearish Bitcoin price outlook in his latest blog article published on January 24th.
According to Hayes, Bitcoin will face a number of different macroeconomic developments in the coming months that could put significant pressure on the price.
The first problem could be the current conflict in the Red Sea between the US and Yemen's Houthis. According to the analyst, this could have a huge impact on international freight traffic. The Netherlands is also involved in this conflict.
According to Hayes, this could lead to an increase in transportation costs. This could lead to a price increase in the form of rising inflation. This could then prevent the US Federal Reserve from implementing the first interest rate cut in March as expected.
Bitcoin crash: support program for US banks ends
Then Hayes gives a second reason. At the beginning of last year, several American banks ran into difficulties, which subsequently led to a significant increase in the price of Bitcoin.
The program to support these banks, the Bank Term Funding Program (BTFP), will soon expire. This could lead to a decrease in liquidity in financial markets, which Hayes says is already reflected in Bitcoin’s decline.
These developments could potentially force the Federal Reserve to take action and delay interest rate cuts or even resume quantitative easing or money printing. Then we have the upcoming US presidential election.
Hayes believes Bitcoin acts as an indicator of what the rest of the financial markets will do. The above developments are not yet reflected there, but they are reflected in Bitcoin's recent decline, says the former CEO.
Hayes therefore expects Bitcoin to fall to the range between $30,000 and $35,000.
“A 30% correction from the ETF approval level of $48,000 is $33,600. Therefore, I believe Bitcoin will find support between $30,000 and $35,000. Therefore, on March 29, 2024, I purchased puts with a strike price of $35,000. I also sold my trading positions in Solana and Bonk at a small loss.”
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