Former BitMEX CEO Arthur Hayes says the collapse of Terra (LUNA) is giving a hint on the bottom price of Bitcoin (BTC).
In a new commentary on Bitmex’s Crypto Trader Digest, Hayes says the decoupling of Bitcoin and Ethereum (ETH) from the equity market, historical prices and negative sentiment towards digital assets all point to crypto bottoming out.
“My bottom checklist:
- Bitcoin / Ethereum move increasingly in a less correlated fashion vs. the Nasdaq 100.
- The current price levels are very close to the previous cycle’s all-time highs.
- The mainstream financial media gloats about how stupid and greedy plebs were who attained short-lived wealth investing in crypto.”
In May, the Luna Foundation Guard sold most of its Bitcoin reserves to maintain the peg of the TerraUSD (UST) stablecoin. Hayes says that the Terra meltdown hints at the lowest Bitcoin could go in the current cycle.
“At the bottom, a typically impervious strong hand can be forced to sell because of uneconomical arrangements festering in their trading books. The LFG is such a seller. To puke 80,000 physical Bitcoin is quite a feat. After contemplating the nature in which these Bitcoins were sold, I am even more confident that the $25,000 – $27,000 zone for Bitcoin is this cycle’s bottom.”
Hayes says that crypto will not make an immediate recovery as traders try to recoup losses during bear market rallies.
“Right now, many traders are sitting on positions that are down 50% to 90%. These traders are in a loss reduction mindset. They want to exit at a less bad price. They are not mentally primed to ship more capital in at these ‘bargain’ prices. Therefore, any rally will be sold into, until the underbrush in the forest is clear and the diamond-handed apes can emerge safely from hibernation.”
He says he is still confident that the prices of crypto will go back up, but it pays to wait.
“You don’t want to sell filthy fiat and buy Bitcoin / Ethereum early only to get shook due to a lack of confidence in your investment thesis. It is better to wait for the all-clear signal from the high clergy of the devil that it is time to join the crusade.”
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The post Has Bitcoin Bottomed Out? Ex-BitMEX CEO Arthur Hayes Says Terra (LUNA) Fiasco Offers a Clue appeared first on The Daily Hodl.