BitMEX founder and cryptocurrency investor Arthur Hayes blamed the price drop and BTC/gold decoupling on US tax payments and tensions in the Middle East.
Arthur Hayes attributes the fall of BTC to liquidity problems and tensions in the Middle East. Tensions in the Middle East remain a key factor in BTC’s near-term price action.
Bitcoin [BTC] had a positive price correlation with gold in recent days. However, the correlation decoupled over this past weekend as BTC plummeted while gold pumped.
Currently, BTC is trading at $63,000, a drop of more than 15% from its mid-March all-time high of $73,700.
“BTC and gold in unison until… the weekend before April 15, tax payments due in the us but the tension of the war between Israel and Iran increased the same weekend, and BTC unmade while $ gold was closed. gold opens high on Monday, while BTC falls again. BTC still works, people just have to pay their taxes,” Hayes pointed out.
Liquidity Crisis During BTC Halving
Last week, Hayes noted that the BTC halving event, scheduled for around April 19, coincided with a “time when dollar liquidity is tighter than usual.” He cited US tax payments in mid-April as one of the catalysts that would drain liquidity from the market, and “add drive to a furious selling of cryptographic assets.”
Tensions in the Middle East Accelerated Hayes’ Projections
As tensions escalated, around $143 billion was wiped from the cryptocurrency market last Saturday, according to data from Trading View. The overall crypto market capitalization barely stayed above $2.2 trillion most recently.
Bitcoin opponent and financial commentator Peter Schiff couldn’t help but take advantage of the drawdown to criticize BTC investors. He claimed that:
“Bitcoin is trading below 27 ounces of gold. it is now down more than 27% since reaching its record of 37 ounces of gold two and a half years ago. given all the huge about Bitcoin and the lack of gold hedge, few probably realize that bitcoin is in a stealth bear market when trading in real money.”
Still, Hayes had previously projected that the liquidity crisis would ease in early May. However, BTC appears to have ruled out tensions in the Middle East, and psychological support at $60,000 is critical for bulls.
Additionally, ETF Flows have dried up as US Spot BTC ETFs recorded net outflows of $36.7 million on April 15. Therefore, a full-blown crisis in the Middle East could drag it below $60,000 with massive discounts.
BitMEX Co-Founder Cautious About Immediate Rally for Bitcoin After Halving
In a recent blog post, Hayes said he expects the cryptocurrency market to experience a tough time in the days surrounding the Bitcoin shorting event, which is expected to take place between April 19 and 20. This could mean a potential decline in the prices of Bitcoin and the other digital currencies in the short term.
“The narrative of the halving being positive for crypto prices is well entrenched. When most market participants agree on a certain outcome, the opposite usually occurs. That is why I believe Bitcoin and crypto prices in general will slump around the halving,” Hayes highlighted.
Hayes acknowledged the idea of optimism around the halving, agreeing that it acts as a bullish catalyst. However, it differs in the timing of its positive effect. “I agree that it will pump prices in the medium term; however, the price action directly before and after could be negative.”, he commented on the event.
By Audy Castaneda
