Arthur Hayes Sees Bitcoin Drop Below $50K Over Weekend, Places Short Bet

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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Last updated:

September 6, 2024 00:03 EDT

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Co-founder and ex-CEO of BitMEX crypto exchange Arthur Hayes said Friday that he expects Bitcoin’s price to drop below $50,000 this weekend. He revealed that he has taken a short position, betting on a decline.

“Pray for my soul, for I am a degen,” he said in an X post.

Bitcoin Drop to $46K Possible as Fed Rate Cut Looms, Analysts Say

Bitcoin was last down 0.7% on Friday, trading at $56,731. It is down nearly 5% over the past week.

Recently, Bitfinex analysts warned that the anticipated Federal Reserve interest rate cut could cause Bitcoin to decline further.

They mentioned that while a 25 basis point cut could boost Bitcoin long-term by increasing liquidity and easing recession fears, a larger cut might negatively impact the price.

If Bitcoin falls by 20%, its value would drop to $46,000, a level not reached since Feb. 8. This view aligns with 10x Research, which identified the low $40,000s as an ideal entry point for the next bull market.

Opinions on the severity of the correction vary. Crypto analyst Moustache believes the market could bottom around $57,000. He bases this prediction on historical fractal patterns, which help identify key support, resistance, and potential trend shifts.

How Short Sellers Benefit from Falling Bitcoin Prices

An investor shorts Bitcoin by borrowing it, selling it, and later buying it back at a lower price to return to the lender, aiming to profit from the price drop. This strategy is used when the investor expects Bitcoin’s value to fall.

It allows investors to benefit from a bearish market outlook. If they believe Bitcoin is overvalued or expect a decline due to market trends or regulations, shorting lets them profit from the drop. Additionally, shorting can protect those with long Bitcoin positions, acting as a hedge against potential market downturns.