BitMEX CEO Arthur Hayes and a pseudonymous trader known as “Crypto Capo” both predicted that the price of Bitcoin (BTC) would drop to $ 3,000 in early 2020. In the short term, both s expect Bitcoin to retest the region at $ 3,000 once again.
In BitMEX Crypto Trader Digest’s letter of April 9, 2020, Hayes stated that while the US stock market sees another step down, all asset classes could “ vomit ”, leading to the correction of the Bitcoin price.
Before the March 12 drop to $ 3,600, “Crypto Capo” forecast a drop to $ 3,000. This week, Crypto Capo again predicts that Bitcoin is likely to fall $ 2,100 to $ 3,000.
Hayes thinks stocks will plunge and Bitcoin will follow
In the short term, Hayes is apparently predicting that the US stock market will retreat after an apparently strong rebound that started in late March.
The recent $ 2 trillion Senate stimulus package organized by the Federal Reserve aims to prevent a further market collapse in 2008 and it appears that this has led to an increased appetite for stocks in recent weeks.
Historical data suggests, however, that in the midst of economic turbulence, the US stock market tends to see several major distortions.
As progress in controlling the coronavirus pandemic is limited to the United States and Europe, global manufacturing has stalled and major European economies appear to be in free fall, high-risk assets such as stocks and Bitcoin are vulnerable to a big fix.
“Bitcoin will be detained without help. Could the price retest $ 3,000, absolutely. As the SPX moves and tests 2,000, all asset classes should vomit again. As violent as the collapse of asset values in Q1, we have almost 100 years of imbalances to unravel the old regime. “
On March 12, the price of Bitcoin fell to $ 3,600, mainly on the futures markets, including BitMEX, OKEx and Binance Futures, while the spot markets remained above $ 4,000.
It remains to be seen whether BTC would retest the recent low of $ 3,600 or consolidate between $ 4,500 and $ 4,800, but another extreme sale could be triggered by the US stock market making a lower dip.
Why Hayes thinks BTC will still end 2020 at $ 20,000
Most countries, especially the United States and Europe, are in a state of panic as the number of cases of coronavirus continues to increase day by day.
While top scientists like Dr. Anthony Fauci have said it will take 12 to 18 months to produce vaccines, several pharmaceutical giants have said they remain optimistic about vaccine production over the next eight months.
Alternative drugs like hydroxychloroquine, a treatment for malaria, have been shown to be effective in the treatment of some patients with coronavirus, but as of yet, no cure has yet been found.
As the United States and Europe see progress in controlling coronaviruses and the emergence of effective treatments, the stock market is expected to show strong response, which could lead to increased demand for Bitcoin and others. cryptocurrencies.
At the end of the year, Hayes still estimates that Bitcoin will reach $ 20,000. This corresponds to the tendency of the price of Bitcoin to increase 10 to 11 months after the block reward has been halved.