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Co-founder and former CEO of the cryptocurrency exchange BitMEX, Arthur Hayes, stated that the recent surge of Bitcoin above $70,000 does not indicate a shift from a bearish trend to a bullish one, and the price of the leading cryptocurrency could decline again.
According to Hayes, Bitcoin continues to exhibit a strong correlation with the stocks of high-tech American companies, implying its dependence on developments in the stock markets.
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“The current rise of the asset may be a temporary recovery, referred to as a ‘dead cat bounce.’ The crypto market has not fully emerged from the risk zone. Acting hastily could be detrimental, as could excessive optimism,” the entrepreneur elaborated.
Hayes believes that in the coming months, the performance of the first cryptocurrency will largely be influenced by the monetary policy of the world’s major central banks and the level of liquidity in global markets. He noted that if the financial system continues to face pressure from high borrowing costs, this could hinder the influx of capital into cryptocurrencies.
Hayes describes the long-term outlook for Bitcoin as “still favorable.” The limited supply of the asset and the increasing interest from institutional investors are gradually laying the groundwork for a new bullish trend.
Previously, economist and investment analyst Lyn Alden stated that the period of “maximum pain” in the Bitcoin market has passed, and the first cryptocurrency is currently in a state of being oversold.
