While many analysts and experts expect the inevitable explosive growth of cryptocurrency, at least one person stands alone and does not exclude that the price of Bitcoin will continue to decline. In his latest BitMEX CEO forecast, Arthur Hayes mentions that the first cryptocurrency could fall to the level of $2,000.
Such a forecast was announced by the head of the popular stock exchange of derivatives on Friday, November 2, in the next issue of the Crypto-Trader Digest.
Check out the new hotness. The latest Crypto Trader Digest just dropped. https://t.co/h2YrqcUafF
— Arthur Hayes (@CryptoHayes) November 2, 2018
Earlier this week, Hayes said that bearish market sentiment could last another one and a half years. He did not mention the specific price frames in that forecast, however, in the subsequent letter for the investors, the head of BitMEX already cites direct numbers.
According to him, while traders studying graphics often consider the beginning of a bear market when the asset drops below a cyclical peak, the preferred strategy is to start counting from when Bitcoin price drops below the 200-day moving average (DMA).
Based on this methodology, Bitcoin entered the bear territory on March 12, when its price was $9,152.
Since then, dropping below the 200 DMA mark, Bitcoin has lost only 37% in value. However, taking into account the previous indicators of the first cryptocurrency, when it fell significantly lower, Hayes believes that the end of the bearish cycle is still very far away. According to him before the initiative goes to the bulls, the price of cryptocurrency could potentially drop to $2,000.
“How deep can we go?” A 75% fall from $9,152 takes us close to $2,000. $2,000 to $3,000 is my new sweet spot but don’t tell Michelle Lee just yet,” wrote Arthur Hayes, referring in the last sentence to CNBC Fast Money, where he recently was on an interview.
As other reasons supporting his forecast, the head of BitMEX called the current low bitcoin volatility.
“Contrary to popular belief, Bitcoin requires volatility if it is ever to gain mainstream adoption. The price of Bitcoin is the best and most transparent way to communicate the health of the ecosystem. It advertises to the world that something is happening–whether that is positive or negative is irrelevant,” says Hayes.
Therefore, he argues, if volatility remains at current low levels, the price will gradually decline.
According to him, the best that traders can do is to try to predict when the bottom will really be, however, as Hayes points out somewhat, they probably will not have the courage to do serious things at that moment.
“You will know it when you see it. And the best part is, you probably will be too chicken to click that oh so scary Buy button,” Hayes added.