The crypto market has been volatile this year and appears to be under renewed pressure after the March rally. The broader crypto market cap has slipped below $2 trillion and BitMEX CEO Arthur Hayes believes the worst is yet to come.
In his latest opinion piece, The Q-Trap, Hayes talks at length about changing global macroeconomic trends. He further explains the weakness of the Nasdaq 100 (NDX) Index and how Bitcoin and the crypto market are closely related to it. Hayes shares the technical chart for the Nasdaq 100 and writes:
On December 27, 2022, the Nasdaq 100 closed at a high of 16567.50 and subsequently hit a local low of 13046.64. Using the tried and true Fibonacci retracement, NDX failed to break the 61.8% retracement on impact. A few days later, it attempted to breach this resistance level again, failed, and has continued to decline ever since.
Courtesy: Arthur Hayes
He also expects the Nasdaq to break below its local low and drop to 10,000 and below. On the other hand, he notes that as the Fed and other central banks have to deal with the inflation monster, they won’t back down from quantitative tightening any time soon.
Crypto crash 2022 is coming
Hayes predicts that there will be a strong ripple effect of the Nasdaq 100 correction on the crypto market. “Bitcoin and Ether are highly correlated with the Nasdaq 100. If NDX crashes, it will take crypto down with it. I buy the June 2022 crash for both bitcoin and ether,” he said.
Hayes also believes Bitcoin and Ether will bottom out before the Fed acts and reverses policy from tight to loose. He adds that Bitcoin (BTC) will hit $30,000 by the end of Q2 in June 2022 and Ether (ETH) could bottom at $2,500.
However, Hayes adds that there are a number of altcoins that he has started collecting, which he finds valuations attractive.
Hayes adds that this is just his “prediction” and he reserves the right to be wrong. In a final note, Hayes adds:
“This analysis is simply an attempt to trade a short-term situation that I believe will occur in risky markets and hedge purchases of altcoins at attractive prices.”
Disclaimer
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication assumes no responsibility for your personal financial loss.
About the author
Bhushan is a FinTech enthusiast and has a keen sense of understanding the financial markets. His interest in economics and finance draws his attention to the emerging blockchain technology and cryptocurrency markets. He is continuously in a learning process and motivates himself by passing on the knowledge he has acquired. In his spare time he reads thriller fiction novels and sometimes explores his cooking skills.
