Bitcoin ‘more likely’ to hit $110K before $76.5K — Arthur Hayes
Market analysts are now voicing optimistic predictions for Bitcoin’s price, suggesting that it may soar to a new all-time high of $110,000 before experiencing any significant retracement. Various factors underpinning this bullish outlook include easing inflation and an increase in global liquidity. Recently, Bitcoin (BTC) has shown a notable surge, closing above $86,000 on March 23, suggesting a positive shift in market sentiment.
Arthur Hayes, co-founder of BitMEX and chief investment officer at Maelstrom, has articulated this bullish thesis, citing a transition in monetary policy from quantitative tightening (QT) to quantitative easing (QE) by the Federal Reserve. He confidently stated in a recent X post, “I bet $BTC hits $110k before it retests $76.5k.” Hayes believes the current economic climate, along with the Fed’s policy changes, are favorable for Bitcoin’s ascendance.
The distinction between QT and QE is critical; QT involves the Fed reducing its bond holdings, while QE entails purchasing bonds to inject money into the economy, ultimately lowering interest rates and fueling spending. Analysts like Benjamin Cowen, the founder, and CEO of IntoTheCryptoVerse, caution that while QT has slowed, it has not ceased entirely. Cowen noted that even as the Fed reduces QT from $60 billion to $40 billion per month, significant amounts are still being withdrawn from the market.
The prospect of the Fed pivoting to QE has historically aligned with Bitcoin’s positive performance, as evidenced during the last QE period in 2020, which saw Bitcoin’s price explode from approximately $6,000 to a peak of $69,000 by November 2021. Current economic conditions seem to echo that trajectory, generating speculation on another potential price leap.
Analysts emphasize that the macroeconomic environment is conducive to amplified Bitcoin engagement. Enmanuel Cardozo, a market analyst at Brikken, observed that rising global liquidity and discussions about establishing a U.S. Bitcoin strategic reserve may contribute to a supply squeeze, thereby propelling Bitcoin further upwards.
However, alongside these optimistic predictions, the possibility of a correction to around $76,500 remains, as this aligns with Bitcoin’s historical volatility patterns, often prompted by profit-taking or sudden market disturbances. Ryan Lee, chief analyst at Bitget Research, reinforced Hayes’ assertions by highlighting Bitcoin’s recent close above significant moving averages while also acknowledging the $88,000 resistance level as a crucial hurdle to overcome.
As traders and investors keenly await the Fed’s anticipated shift towards QE, the enthusiasm surrounding Bitcoin remains palpable, hinting at an exciting phase for cryptocurrency market dynamics.
