Despite the intense volatility in the broader cryptocurrency market and the fluctuations in Bitcoin (BTC) price, some stakeholders remain optimistic.
These optimists consider the ongoing downturn as normal corrections in a bull market.
Is Bitcoin Price Correction a Setup for a Rebound?
Notably, Arthur Hayes, BitMEX co-founder, and renowned analyst, recently outlined strategic ways to navigate the Bitcoin market cycle.
Hayes opines that BTC’s current price fluctuation may bottom at $70,000. This would represent a 36% pullback from Bitcoin’s all-time high (ATH) of $109,114.88, which it attained in January this year.
According to him, a 36% correction is not unusual in a bull market before another major rally. Hayes suggests that Bitcoin is currently experiencing a correction and could rebound after it bottoms at around $70,000.
However, he boldly predicts that the traditional S&P 500 and NASDAQ Composite indices must enter a free fall for Bitcoin to rebound.
Additionally, a collapse has to occur in a major traditional finance firm. Such an event could then trigger intervention from central banks like the Federal Reserve, PBOC, and others to shift their views on the current monetary policies.
In essence, the global economy needs to suffer a shock and weaken so that banks can cut interest rates. This, in turn, might stimulate favorable market conditions for risk assets.
Hayes believes such a shift could create the right buying opportunity for crypto assets like Bitcoin. A spike in purchases would naturally lead to a rally.
The BitMEX co-founder offers critical advice to Bitcoin investors. He noted that while most “aggressive traders” would look to buy the dip during this correction, this is not the better option. This is because buying now would create mental stress for holders.
Hayes urged investors averse to risk to exercise patience and wait for central banks to ease monetary policy before investing their capital in crypto assets. This will help them avoid unrealized losses.
Investor Sentiment and Market Indicators
Hayes’ post aligns with Bitcoin’s current volatility, with prices fluctuating widely between a low of $76,624.25 and a high of $82,087.03.
Meanwhile, the Bitcoin Fear and Greed Index, at 15, signals that investors are extremely cautious about investing in the coin.
Analysts say this fear might have been triggered by other industry activities, such as the selloff by miners.
According to on-chain data, over 11,000 BTC were transferred to exchanges in a move that signaled heavy liquidation pressure.
Additionally, there have been recent concerns as whales move BTC to exchanges.
Some predict that if the selloff scare continues, BTC price could plummet to $73,600. However, if demand increases and steadies for a while, the asset could rebound to above $86,500.
Will Bitcoin Pull a Surprise on the Market?
With the current selling pressure in the market, some market watchers are aligning with Arthur Hayes’s prediction that BTC could test a low of $70,000. As such, market observers agree that Bitcoin could avoid dropping this low if it maintains the $70,500 level as support.
According to market data, the price of Bitcoin has rallied by 2.96% to $81,568.42 in the last 24 hours.
Interestingly, investors are actively trading as volume has jumped by 20.16% to $60.55 billion within the same timeframe.
However, stakeholders remain observant of market trends to see if more selloffs will occur or if the asset could post a rebound.
