Bitcoin (BTC) Hits $5,000 After Sell-Off, BitMEX CEO’s Prophecy Fulfilled
In July, as reported by Ethereum World News, Arthur Hayes, the famed chief executive at Hong Kong-based BitMEX, unexpectedly predicted that Bitcoin (BTC) didn’t bottom at $5,800, even while the crypto market’s leading analysts begged to differ.
At the time, Hayes, a former Citibank and Deutsche Bank trader/analyst, claimed that “I think we’ve haven’t seen the worst yet,” before adding that BTC was likely to test $5,000 before truly bottoming. Now, after nearly a week of tumultuous price action, which began on Wednesday morning, BTC has fallen under $5,000 for the first time in 2018.
This move under $5,000, which was catalyzed by an influx of selling pressure, took many traders aback, as many expected for BTC to hold and find a home at $5,600 after Wednesday’s initial sell-off. The sell-off, as you are likely aware of, decimated over $20 billion worth of value in the cryptocurrency market at large.
So, interestingly, with this continued downtrend and growing levels of bearish sentiment, Hayes’ bearish prediction has unfortunately been fulfilled.
Hasn’t Bottomed Yet?
However, in a recent installment of BitMEX’s Crypto Trader Digest, a newsletter focused on crypto market happenings, Hayes, along with BitMEX’s in-house analyst team, called for bitcoin to capitulate lower, due to a number of historical trends. This call, interestingly, is a far cry from Hayes’ original $50,000 BTC call for year’s end.
As reported by Ethereum World News previously, Hayes first told Yahoo Finance that Bitcoin’s bear market could continue well into 2019, citing his five-year experience trading Bitcoin and altcoins in this nascent market. Following up on this claim, just days later, the BitMEX executive doubled-down on his opinion that crypto’s next bull run is months, if not years away.
He explained that all markets in all their shapes and sizes undergo reversal phase, clearly articulating his belief that BTC, even at $6,400 (price at the time of Hayes’ writing), was far from finding a bottom.
Citing BitMEX Research’s in-depth analysis of Bitcoin’s historical performance, Hayes noted that the cryptocurrency market’s current downtrend, which purportedly began on March 12th (BTC spot fell under its 200-day MA), is likely to last for a minimum of 200 more days.
Moreover, it was implied that cryptocurrencies could fall even lower, as BTC’s “peak-to-trough” (PTT) decline was divulged to be only at 67%, compared to digital asset’s historical PTT declines of 87% and 94%.
Then touching on volatility, Hayes explained that BTC “require volatility” to eventually reclaim its position as the mainstream media’s circus freak, adding that the price fluctuations of bitcoin are the “best and most transparent way” to express the health, performance, and maturation of this industry.
So, seeing that volatility has declined (save for the past week), Hayes noted that prices “will slowly leak lower” to a prospective low of $2,000, a “sweet spot” in the eyes of the BitMEX chief and his analyst team.
Although this ultra-bearish sentiment evidently exists, some aren’t convinced that $2,000 is in Bitcoin’s cards, as there are still a number of fundamental and technical factors that should give BTC support, even in tough times like these.
Title Image Courtesy of Andre Francois via Unsplash