Bitcoin slipped to under $56,000 on Wednesday, continuing its downtrend.
In a worst-case scenario, the world’s largest crypto asset could gradually decline to $50,000, according to Arthur Hayes, co-founder and former CEO of BitMEX.
Potential for Altcoin Carnage
In his latest article titled ‘Boom Times… Delayed,’ Hayes predicted that altcoins could potentially experience even steeper losses. His bearish outlook is rooted in the broader macroeconomic environment, particularly the Federal Reserve’s actions and the US Treasury market dynamics.
He noted that while the Fed has paused rate hikes as of the August 2024 Jackson Hole meeting, the bond market’s reaction has been more pronounced, with yields on 10-year Treasury bonds climbing towards 5%. This rise in yields, fueled by concerns over inflation and government spending, has already led to a 10% correction in the stock market and increased fears of regional bank failures.
Despite this bearish outlook, Hayes remains long on BTC and certain reliable altcoins, though he is avoiding leveraged positions. He anticipates that significant intervention – likely in the form of liquidity injections – could begin in late September of this year, which may stabilize the markets and potentially boost bitcoin’s price.
For now, Hayes said he is focused on increasing his positions in solid “shitcoin projects,” a.k.a altcoins at discounted prices, while acknowledging that short-term market movements are unpredictable. His long-term thesis remains that central banks will eventually resort to money printing to address economic challenges, which could ultimately be bullish for bitcoin and other risk assets.
Compelling Opportunity
The current market conditions remain uncertain, and September has proven to be a bearish month, not just for crypto but across all asset classes. But QCP Capital said that October has the strongest bullish seasonality, with Bitcoin posting positive returns and an average gain of 22.9% in 8 out of the last 9 ones.
This pattern could be driving the continued call buying in the volatility market. If this seasonal trend holds true again this year, the trading firm suggests that accumulating during the September dip and taking profits in October or toward the year-end could be a strategic move.
“September offers a compelling opportunity to accumulate BTC spot ahead of a potential rally in October and the upcoming US election.”