BitMEX Co-Founder doubts Bitcoin price bottom will arrive until a $28,500 retest
Former BitMEX CEO Arthur Hayes saw no clear support for Bitcoin until it hit its lowest point since July. He also doubts the ability of the Fed to fight inflation. At the time of writing, Bitcoin price is changing hands at $36,248.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price won’t bottom until it retests $28,500
BitMEX Co-Founder – just made an interesting Bitcoin price forecast in his biweekly analysis. Despite his expectations that the Federal Reserve will not raise interest rates, he remains skeptical that Bitcoin’s bottom will come until a retest of $28,500.
In BitMEX’s latest post from Crypto Trader Digest titled “Bottomless,” the former CEO extols cryptocurrencies as the “last free market on earth.” He explained that due to “wanton” money printing, large banks and governments can capture other asset prices at “politically expedient levels.”
He then realized that while cryptocurrencies have dropped significantly in recent weeks, the Federal Reserve hasn’t even raised interest rates yet. As a result, he suspects there could be more havoc in the market when the expected rate hike in March arrives. However, he also expressed doubts about whether the Fed can raise rates without blowing the market away.
“If the Fed publicly stated it will contract the size of its balance sheet, then how can it maintain its pledge to backstop corporate issuers?” said Hayes. “The market has woken up to this inconsistency, and yields have begun a small breakout to the upside.”
Hayes predicts the Fed will choose to continue with easy monetary policies with no political effect, despite claims to the contrary. As history has shown, news of increased inflation tends to be positive for the Bitcoin price.
Another FOMC meeting will occur later today, which markets are anxiously awaiting. Hayes suggested that investors should not wait for the Fed to announce that they have changed their mind and expect the cryptocurrency to receive “before” that.
Hayes sees Bitcoin’s next real resistance at $28,500 – roughly where it bottomed out last July. If this level breaks, he expects a liquidation to bring Bitcoin back to $20,000 – its 2017 high.
“If either of Bitcoin’s 2017 and Ether’s 2018 previous ATH ($20,000 and $1,400 respectively) are breached on a daily candle, then I don’t even want to think about it,” he said.
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