Arthur Hayes Expects Bitcoin Price Bounce After Cashing Out Short Position
Arthur Hayes Closes Short Bitcoin Position, Predicts Rally Amid Rising U.S. Dollar Liquidity Expectations.
Key Takeaways:
- Arthur Hayes has closed his short Bitcoin position, predicting a Bitcoin rally this week.
- Hayes' prediction is tied to expectations of increased U.S. dollar liquidity.
- Bitcoin's September performance aligns with historical bearish trends leading to halving cycles.
Arthur Hayes, former CEO of BitMEX, has generated excitement in the crypto community with his latest move. On September 6, Hayes anticipated a Bitcoin correction and opened a short position, betting on a potential downturn below $50,000. However, he swiftly closed the position just two days later, netting a modest 3% profit.
Hayes Predicts Bitcoin Recovery Amid Liquidity Expectations
In a post on social media platform X, Hayes attributed his shift in sentiment to potential liquidity injections by the U.S. Federal Reserve.
He hinted that “Bad Gurl Yellen,” referencing U.S. Treasury Secretary Janet Yellen, might introduce policies to stabilize financial markets, which could benefit Bitcoin prices.
“Closed my $BTC short, made 3% profit… If stuff continues to puke next week, $BTC MIGHT rise anticipating more $ liq,” Hayes wrote.
This shift contrasts with Hayes' previously bearish forecast in late August when he warned of harmful long-term consequences the Fed rate cuts could have on Bitcoin’s price.
However, a potential boost in U.S. dollar liquidity could provide a crucial catalyst for Bitcoin's price action.
Analysts like Jamie Coutts of Real Vision have pointed out that Bitcoin’s performance often correlates with changes in the M2 money supply, which measures cash and bank deposits.
As of May 2023, the M2 supply turned positive for the first time since November 2023, a sign that investors might start flocking to assets like Bitcoin as hedges against inflation.
Hayes and others foresee that further market downside may prompt the Federal Reserve to act, spurring Bitcoin's price movement upwards.
Bitcoin's September Struggles Align with Historical Trends
Despite Hayes' optimism, Bitcoin's September performance has raised concerns, with the cryptocurrency facing a 9.6% drop this month.
BTC's 1-month Chart shows a 9.6% decline so far in September/ Source: CoinMarketCap
According to popular analyst Rekt Capital, this correction aligns with Bitcoin’s typical behavior ahead of its halving cycles.
Historically, September has been a bearish month for Bitcoin, with average returns down nearly 5%, per data from CoinGlass.
Additionally, current market uncertainty stems from macroeconomic factors, including disappointing U.S. jobs data released on September 5, which has added to concerns over the economy's health.
These developments and speculation about potential Federal Reserve interest rate cuts have contributed to the volatility.
Jimmy Aki
Drawing from his background in economics, Jimmy has monitored blockchain development for years, firmly believing in its power to democratise finance. Beyond offering commentary on the latest crypto developments, he also spends his time analysing open-source codes of promising projects on GitHub. Jimmy holds Bitcoin and Ethereum.
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