Arthur Hayes, the co-founder and ex-CEO of BitMEX crypto exchange, made a bold prediction on Friday, stating that he anticipates bitcoin's price to dip below $50,000 over the upcoming weekend. Hayes disclosed that he has taken a short position, essentially betting on a downward trajectory for the cryptocurrency.
In an X post, Hayes humorously remarked, "Pray for my soul, for I am a degen." This move by Hayes reflects his confidence in bitcoin's potential decline in the short term.
bitcoin-drop-to-46k-possible-as-fed-rate-cut-looms-analysts-say">bitcoin Drop to $46K Possible as Fed Rate Cut Looms, Analysts Say
Currently, bitcoin is trading at $56,731, experiencing a 0.7% decrease on Friday and nearly a 5% decline over the past week. Bitfinex analysts have raised concerns regarding the potential impact of an anticipated Federal Reserve interest rate cut on bitcoin's price movement.
They suggested that while a modest 25 basis point cut could bolster bitcoin in the long term by enhancing liquidity and assuaging recession fears, a more substantial cut could have adverse effects on the cryptocurrency's value.
If bitcoin were to plummet by 20%, it could reach a value of $46,000, a level not seen since February 8. This projection aligns with the analysis conducted by 10x Research, which identified the low $40,000s as an optimal entry point for the upcoming bullish market phase.
Views on the severity of this potential correction vary among experts. crypto analyst Moustache opines that the market may find a bottom around $57,000, citing historical fractal patterns as a basis for predicting significant support levels, resistance points, and potential shifts in trends.
bitcoin-prices">How Short Sellers Benefit from Falling bitcoin Prices
Short selling involves investors borrowing bitcoin, selling it, and repurchasing it later at a lower price to return to the lender, all in a bid to capitalize on price declines. This strategy is typically employed when investors foresee a drop in bitcoin's value and seek to profit from this anticipated downturn.
Short selling enables investors to leverage a pessimistic market outlook. Whether they perceive bitcoin as overvalued or anticipate a decline due to market dynamics or regulatory developments, shorting allows them to benefit from downward price movements. Moreover, short positions can serve as a safeguard for individuals holding long bitcoin positions, serving as a hedge against potential market downturns.
