In his latest blog post, the former CEO predicted that the Fed will continue its rapid rate hike process throughout the third quarter, further adding to the current downward pressure on the crypto market. He also warned of the possibility that the UST crash could be a sign of a local bottom.
Digging into what caused the recent downturn in the Terra ecosystem, he agrees with the suggestion that the broad-based risk-reducing environment spurred venture capitalists to cash in on their investments. invested in LUNA at the same time, eventually leading to a liquidity crisis that caused the price of the stablecoin to plunge.
After losing the peg, people started swapping UST for other stablecoins or fiat currencies, making the situation worse and culminating in the LUNA token losing 100% of its value.
However, Arthur Hayes made it clear that the Fed’s hawkish policies were only an indirect catalyst into the Terra ecosystem as “the last drop of water” due to “the collapse that was predetermined because of the way they were programmed”.
By analyzing the correlation between Bitcoin/ETH and Nasdaq 100 during the recent global equity sell-off, Hayes concludes cryptocurrencies are starting to decouple from riskier assets in general and cites that as an indicator. about a potential local bottom.
Additionally, as the prices of Bitcoin and ETH are both near their previous local tops, Hayes predicts Bitcoin’s bottom could be between $25,000 and $27,000 while ETH’s bottom is between $1,700 and $1,800. As such, he noted encouragingly that the local bottom is fairly close to the previous all-time high.
While he hopes prices have bottomed out, Hayes cautions that there may not be a “rapid rise” in the near future. Noting that the broader market will continue to be volatile and undulating in the short term, he emphasized that only the Fed’s drastic current policy changes can bring the market back significantly.
Despite the recent volatility in the broader market, Arthur Hayes reaffirmed his belief that ETH can hit $10,000 by the end of the year provided the bull market returns.
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Harold
CoinCu News
London, united kingdom, 22nd November 2024, Chainwire
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