Arthur Hayes, the former CEO of the crypto exchange BitMEX, believes Bitcoin has found its bottom. He states that the price of Bitcoin should hold at the $80,000 support level after it fell over 35% from its all-time highs.
Hayes points to changing US liquidity conditions as the reason for his prediction. He notes that the Federal Reserve is set to end its quantitative tightening program next month. This means the Fed’s balance sheet will stop shrinking, which should increase the amount of money available in the financial system.
This extra liquidity often benefits riskier assets like cryptocurrencies. Hayes summarized the situation as “minor improvements in liquidity.” He also observed that bank lending increased in November, adding to the positive conditions.
Based on these factors, Hayes expects a Bitcoin price recovery. He predicts the market will fluctuate below $90,000. There might be one more drop into the low $80,000s, but he believes the $80,000 level will ultimately hold as a floor.
Hayes also commented that a broader market recovery requires a sell-off in AI technology stocks. He argues that a decline in these popular stocks would pressure the Federal Reserve to print more money to support the economy.
Meanwhile, expectations for future Federal Reserve policy have been extremely volatile. Bets on an interest rate cut in December have swung dramatically. The probability of a cut recently jumped to around 79%, up from just 42% a week earlier.
This wild shift in market sentiment did not go unnoticed. Economist Mohamed El-Erian described the volatility as “stunning.” He stated that such unpredictability is the opposite of the stability the Fed usually aims for.
El-Erian attributed the chaos to several factors. These include economic data disrupted by a government shutdown, conflicting pressures on the Fed, and a lack of clear strategic direction from the central bank.
