According to Hayes, selling pressure on Bitcoin and other cryptocurrency assets would increase during this period due to the constrained US dollar liquidity.
HISTORICAL POINTS
- Hayes predicts a significant drop in the price of Bitcoin at and around the halving event.
- Right now, bitcoin is re-accumulating near its all-time high values.
- The Fed's decision to defer rate decreases and tighten quantitatively is still in effect.
In a recent blog post, BitMEX CEO Arthur Hayes discussed the status of the economy, the quantitative tightening policies, and the performance of the price of Bitcoin during the halving event. The price of bitcoin surprised everyone by rising above $72,000 on Monday, April 8, and it is still strong. But as the Bitcoin halving draws near, the most important question is whether BTC can stay near the ATH.
Volatility of Bitcoin Prices Around Halving Event
"It is thought that the halving of Bitcoin will boost the cryptocurrency markets." I concur that it will raise prices in the medium run, however there may be negative price movement both before and right after.
Rekt Capital, a cryptocurrency specialist, presented an analysis showing that Bitcoin is progressively moving from its Pre-Halving Retrace phase to a "Re-Accumulation" phase. Right now, the goal is for Bitcoin to continue moving sideways both before and after the halving event.
The re-accumulation phase often lasts for a few weeks or even up to 150 days, or around five months. Many investors may experience restlessness during this time as a consequence of boredom, impatience, and dissatisfaction over their inability to see substantial returns on their Bitcoin investments in the short term following Halving. It is remarkable, nevertheless, that for the first time in this cycle, the re-accumulation Range is building around the new all-time high region.
Fed Rate Cuts in Focus
The FOMC meeting and the March CPI report are the two key events that the cryptocurrency market is anticipating this week. Everyone's eyes will be on the Fed's strategy for handling the rate-cut decision.
Galaxy Digital CEO Mike Novogratz said in a statement that he thought the Federal Reserve may still decide to lower interest rates even in the absence of strong arguments. Novogratz views this prospective action as
— Mike Novogratz (@novogratz) April 8, 2024
Call me crazy but I don’t see one good reason for the fed to cut rates. Yet think they will. It’s a great set up for $BTC, gold, silver, copper. It’s not a great set up for the USA though. We need a politician who will cut spending dramatically!
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