Key points:
-
Bitcoin should have bottomed out at $80,000 last week, according to former BitMEX CEO Arthur Hayes.
-
Liquidity conditions are poised to turn in the crypto bulls’ favor, with the US Federal Reserve set to end QT.
-
The buzz around future Fed rate-cut moves remains highly volatile.
Bitcoin (BTC) should retain $80,000 support as US liquidity conditions change to boost crypto bulls.
In his latest X content, Arthur Hayes, former CEO of crypto exchange BitMEX, predicted an inbound BTC price recovery.
Hayes on BTC price: “I think $80,000 holds”
Bitcoin fell more than 35% from all-time highs as it hit its latest floor of $80,500 last week, but for Hayes, the worst is now over.
The reason, he told X followers, is US liquidity trends. The Federal Reserve is due to end its latest quantitative tightening (QT) phase next month — its balance sheet will stop shrinking, ushering in more liquidity for crypto and risk assets.
“Minor improvements in $ liq,” he summarized.
Hayes predicted that the Fed’s balance sheet should stop shrinking after this week, while noting that bank lending went up in November.
For crypto, the knock-on effect should be clear: a classic rising tide of liquidity that lifts Bitcoin and altcoins.
“We chop below $90k, maybe one more stab down into low $80k’s but i think $80k holds,” Hayes continued.
The ex-BitMEX executive stayed bullish throughout Bitcoin’s descent from its October record, earlier this month reiterating the need for quantitative easing (QE) to return for BTC price pressure to lift.
Last week, he added that stocks needed to “puke” in a similar manner to crypto before the recovery sets in.
“We are playing for more money printing, and for that we need AI tech stocks to crater,” he concluded.
From hawkish to dovish in an instant
Market expectations of Fed changes to financial policy have undergone considerable fluctuations over the course of the US government shutdown and beyond.
Related: Death cross vs. $96K rebound: 5 things to know in Bitcoin this week
Amid a lack of macroeconomic data, bets of another interest-rate cut at the Fed’s December meeting were hard to place.
The latest data from CME Group’s FedWatch Tool puts the odds of a 0.25% cut at around 79% as of Monday, compared to just 42% a week ago.
The volatility did not go unnoticed in professional circles. Commenting, economist Mohamed El-Erian described the phenomenon as “stunning.”
“This kind of wild volatility is the opposite of the ‘predictability and stability’ the Fed usually strives for, especially as the central bank at the core of the global payments system,” he argued on X on the day.
“It’s the result of shutdown-disrupted data, a dual-mandate squeeze, a lame-duck Chair, and the lack of a clear strategic framework from the world’s most powerful central bank, which has been overly data-dependent for a protracted period.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
