Exec warns of a Bitcoin ‘price slump’ despite halving hopes – Why?

    Hayes projected that BTC could dump during the halving event.
    However, Peter Brandt expects a dump only after a slight pump. 

Bitcoins price climbed back up to $72,700, not far from the peak of $73,700 it reached in mid-March. This surge caused many bearish investors to suffer losses as they were forced to exit their short positions.

Some analysts anticipate a price correction for Bitcoin within the first two weeks following the halving, while others speculate a potential significant drop in value around this time.

According to Arthur Hayes, the founder of BitMEX exchange, April could be an optimal month for taking short positions because of the anticipated reduction in market liquidity. In his latest blog entry, Hayes expressed this viewpoint.

“The idea that cryptocurrency prices rise after a halving event is widely accepted. However, when the majority of market players anticipate a particular outcome, the opposite result often prevails. Therefore, I have reason to believe that both Bitcoin and the crypto market as a whole will experience a price drop around the time of the next halving.”

Hayes added,

When the dollar liquidity is scarce, as it is during the halving event, this situation can intensify the selling frenzy of cryptocurrency assets that are already in high demand.

BTC halving event: Will price slump or pump?

Peter Brandt and Benjamin Cowen held comparable, yet distinct, views on Bitcoin’s price movement around the halving event contrasting Hayes.

Based on Brandt and Cowen’s analysis, Bitcoin (BTC) might experience a price surge and subsequent drop if it mirrors the pattern of a spot Bitcoin ETF launch.

Exec warns of a Bitcoin ‘price slump’ despite halving hopes – Why?

Brandt projected the dump could happen in the second half of April, towards May. 

According to the forecast, the market downturn may come to an end around early May, which aligns with Hayes’ suggestion for restarting trades based on his perspective. In part of his post, Hayes expressed this viewpoint.

“The timing of the halving adds further weight to my decision to abstain from trading until May.” 

According to AMBcrypto’s analysis using data from Coinglass, the Open Interest (OI) in the cryptocurrency futures market fluctuated between $31 billion and $36 billion since mid-March. In simpler terms, OI represents the total number of open contracts in the futures market, providing insight into the market’s liquidity levels.

In other words, when the price of Bitcoin (BTC) hovers around its past record high in the OI (Open Interest) market for Option contracts in Over-the-Counter (OTC) trading for Oil (OI), it mirrors the sideways trend. A significant decrease in this metric might suggest Hayes’ prediction of a reduction in liquidity.

However, caution should be key as we head into the halving event. 

Read More

2024-04-09 12:07