Bitcoin Could Dump Below $40,000 in January and Here is Why

• Arthur Hayes, co-founder of BitMEX exchange, predicts Bitcoin will fall below $40k soon due to upcoming US Treasury announcement
• Hayes bought put options on Bitcoin with $35k strike price, showing his confidence in price dropping in short term
• Though recently bullish, Hayes now expects decline until Fed potentially cuts rates in March, which could spur a Bitcoin rally

Arthur Hayes, the co-founder of the BitMEX cryptocurrency exchange, believes that Bitcoin will decline below $40,000 in the near future.

Hayes’ Bearish Outlook

Hayes has adopted a pessimistic view on Bitcoin’s price, predicting a drop below $40,000. He cites the upcoming U.S. Treasury quarterly refunding announcement as a factor contributing to his revised outlook.

To back up his prediction, Hayes has acquired put options on Bitcoin, with a strike price of $35,000 set to mature on March 29. This trade indicates his confidence that Bitcoin will fall in the short term.

The Reasoning Behind the Drop

Hayes believes Bitcoin’s decline will continue until the U.S. Treasury’s quarterly refunding announcement on January 31. Historically, such moves by the Treasury have led to volatility in risk assets like Bitcoin.

After the announcement, Hayes expects the Federal Reserve could cut rates in March and renew liquidity programs. This would inject more money into markets and potentially spur a Bitcoin rally.

Hayes’ Previous Forecast

While Hayes currently predicts a Bitcoin drop, his January 16 forecast was more optimistic.

He suggested the total crypto market cap could surge above $13 trillion in 2022. Hayes believes the cap could surpass the previous all-time high from 2021.

The earlier forecast shows Hayes sees potential for upside later in 2022. For now, he is focused on an impending decline below $40,000.

Conclusion

Arthur Hayes has long been a prominent voice in crypto markets. His predictions hold weight given his background.

It remains to be seen how accurate his latest bearish call will prove. But his put options trade shows conviction in an impending drop below $40,000.