Arthur Hayes has squoze his short BTC trade after weekend doubts about a deep correction. As per our coverage on Sept. 6, Hayes, the former CEO of the BitMEX cryptocurrency exchange, said BTC (tickers down $53,817) could go below the $50,000 psychological level this weekend while opening a short position.
Easing investor concerns, Hayes announced the closure of his short Bitcoin position, expecting a potential Bitcoin rally as soon as next week. He wrote in a Sept. 8 X post:
“Stopped $BTC short, 3% profit enough to feed and drink for entire KBW, Bad Gurl Yellen watching mrkt & a weekend release if things cont to vomit next week $BTC COULD go UP anticipating more $liq.”
In his opinion, an unexpected boost in the Bitcoin rate may occur by next week because of the additional purchases of USD provided by the Federal Reserve. Declining economic activities and financial market performances during the period may necessitate this action.
Read also: Whales Selling Bitcoin May Push BTC Below $50K Amid Upcoming US Interest Rate Cut
Bitcoin Price Could Rally on US Money Printing
The hope for more liquidity injections coming from the biggest economy can be a major boost to the morale of crypto investors and bitcoin fluctuation. More downside action in traditional markets could indeed invite liquidity injection by the Fed, Hayes wrote in a Sept. 7 X post:
“As you know, Bad Gurl Yellen is watching, if only the stock markets decline further she will ensure there is a heavy injection of more jam by printing.”
The M2 money supply, which estimates all cash and short-term bank deposits across the US, could be the key to the next Bitcoin rally, according to Jamie Coutts, chief crypto analyst at Real Vision. He wrote in a May 16 X post:
“That is due to the alignment with $BTC bull cycles. Well, of the big 3 I track in my Bitcoin/Liquidity framework, Global M2 seems to track the most of the moves.”
However, the velocity of money through the economy is more critical than the nominal quantity. “Bitcoin tracks M2 momentum,” said Coutts.
For the first time since November 2023, during the/bootstrap beginning of May, M2’s money supply went higher year-over-year, highlighting that investors could start looking for such things as hedging instruments against inflation – like Bitcoin.
Bitcoin’s September Correction in Line with Bull Halving Cycle: Analyst
Some of the highlights for this week include: Investor sentiment was dealing with a severe blow this week as BTC price correction below $50K spurred ‘extreme fear.’ Despite widespread concerns, Bitcoin’s September downside remains in line with previous Bitcoin halving cycles, wrote popular analyst Rekt Capital in a Sept. 6 X post:
“Earlier this year when BTC pulled back -7% in September 2021, it bounced back by +39% in the following October, and as we are in this current September it is down by -9%.”
September has been a bad month in terms of downside volatility where the average return of Bitcoin has been -4.69%, making it the most bearish month in regard to the average return established by data from CoinGlass.