What a big difference a number of months can make. It appears like a life span in the past that Arthur Hayes, CEO of cryptocurrency derivatives system BitMEX, predicted that the bitcoin cost could attain $50,000 in 2018. In fact, it has been fewer than six months, though the events that have transpired for the duration of that interlude have been adequate for Hayes to slash his short-expression crypto forecast by far more than 95 p.c.
CCN described earlier this week that Hayes, a previous Citigroup trader, is now predicting that the bitcoin downtrend could final a further 18 months, mirroring the “nuclear bear market” the crypto business seasoned in 2014 and 2015. Producing in Friday’s edition of the BitMEX Crypto Trader Digest, Hayes doubled down on that portentous outlook.
Although chart-watchers often handle bear marketplaces as commencing as soon as an asset dips underneath its cyclical peak, Hayes said that a much better tactic may be to mark the beginning of the bear current market as the date at which the bitcoin rate falls under its 200-day going average (DMA). By this metric, bitcoin entered bearish territory on March 12 when it was priced at $9,152 and has only found a 37 p.c drop considering the fact that dropping beneath the 200 DMA.
Offered that past bear marketplaces have found bitcoin crack a great deal additional down below its 200 DMA, he argued that it’s possible we however have a extended way to go ahead of the bears complete twisting the knife, perhaps dropping BTC as minimal as $2,000 right before the bulls get back their footing.
“How low can we go?” he asked. “A 75% tumble from $9,152 normally takes us near to $2,000. $2,000 to $3,000 is my new sweet location but really don’t explain to Michelle Lee just nevertheless.” [Note: Hayes is likely referring to CNBC host Melissa Lee]
Hayes also cited the decline in bitcoin volatility as justification for his bearish outlook, using a unique tack from Fundstrat founder Tom Lee, who reported that he was “pleasantly surprised” to see the drop in volatility specified ailments in the broader equities marketplaces.
“Contrary to common perception, Bitcoin involves volatility if it is ever to get mainstream adoption. The value of Bitcoin is the greatest and most transparent way to talk the health of the ecosystem. It advertises to the earth that one thing is happening–whether that is positive or destructive is irrelevant.”
“The Bitcoin value volatility is the gateway drug into the ecosystem,” he ongoing. “If volatility stays at these depressed concentrations, the price tag will slowly leak reduced. For these of us who lived via the 2014-2015 bear current market, we all await that nasty ass candle that breaks the soul of the bulls. Then, and only then, will volatility and the cost ratchet increased.”
In the meantime, Hayes reported that the most effective traders could do is attempt to simply call the bottom, though they possibly won’t have the fortitude to act when their instincts convey to them that the ground is in.
“The vital consideration to ‘calling the bottom’ is the value action all-around the very last gasp of the bears. You will know it when you see it,” he concluded. “And the best aspect is, you most likely will be much too chicken to click that oh so frightening Acquire button.”
Highlighted Graphic from Shutterstock
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