- Former BitMEX CEO thinks that Bitcoin’s prices cannot go any lower after a series of implosions sent prices tumbling.
- He notes that “irresponsible entities” have run out of Bitcoin to sell, and the only way for the asset is up.
- Bitcoin stands on a delicate precipice ahead of the release of new inflation data.
Bitcoin’s (BTC) price has suffered from a string of negative reports involving some of the largest entities in the digital asset industry. However, BitMEX founder believes the asset has survived its darkest days and can expect a rally in the coming weeks.
Arthur Hayes, ex-CEO of digital asset derivatives platform BitMEX, thinks BTC is set for a rally since the “largest most irresponsible entities” have sold the last of their Bitcoins. Hayes argues that all the firms prone to going bankrupt have all gone bankrupt, leaving the coast clear for the bulls.
“I can’t demonstratively prove that all Bitcoin held by these failed institutions was sold during the multiple crashes, but it does look as if they tried their best to liquidate the most liquid crypto collateral they could right before they went under,” said Hayes.
The former CEO backs his theory by saying that firms facing a liquidity crisis have no reason to hold onto their BTC when they urgently need fiat. Hayes notes that the typical playbook for distressed firms is to call in loans and then sell their BTC holdings to avoid going under.
In the weeks after FTX’s collapse, BTC fell to $15,599 as entities affected by the black swan event unloaded their BTC holdings. In the last few months, several top players in the industry have filed for bankruptcy, including FTX, BlockFi, Voyager Digital, Three Arrows Capital (3AC), and Celsius.
BTC has an eventful week ahead
Some analysts have termed this week the most important for BTC, with several key events on the horizon. First on the list is the release of the Consumer Price Index (CPI) for November and the decision of the Federal Reserve regarding rate hikes.
Analysts believe that with two weeks till the end of the year, Bitcoin could go on a historical “Santa Rally”. Other factors that could decide BTC’s path are the U.S. dollar index (DXY) movement, Bitcoin’s supply shock ratio nearing a 10-year high, and the end of miners selling their assets.
“The mother of all decisions is coming, expect huge volatility next week,” said one financial analyst. “The incoming DXY move will decide the fate of the crypto and stock market.”
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