Bitmex founder and former CEO Arthur Hayes stated that while the Terra network’s hurricane UST has come to an end, it has heavily impacted the cryptocurrency market which is not exempt from a further downturn.
Arthur Hayes Says BTC Should Drop
In a new post, Hayes stated that the top two cryptocurrencies on the market could still pull back to their all-time highs reached in 2017, which he says could act as vital and final support for a new cycle.
As Hayes stated, he intends to buy BTC at $20,000 and ETH at $1,300.
While many analysts, such as Michael Van de Poppe, say the impact of Luna’s bankruptcy has already been priced in, Hayes says the market turmoil is not over.
That’s because, according to him, the US Federal Reserve will continue its mission of raising interest rates to fight inflation. Consequently, assets considered risky, such as BTC, will continue to suffer in the markets.
“During a meltdown, the market looks for the ‘weakest’ sellers and strains their hands. This week’s drop was accentuated by the forced sale of all Luna Foundation Bitcoins to defend the UST:USD peg. But the Fed will continue its quixotic battle against inflation and that will continue with the destruction of risky assets,” he pointed out.
Furthermore, Hayes admitted that his previous prediction of BTC at $30K and ETH at $2500 happened faster than he expected.
According to him, the collapse proved that the cryptocurrency markets could not cope with the US Fed’s rising interest rates and this weakened the crypto asset’s argument for investors.
“I dutifully sold my BTC at $30,000 and ETH at $2,500 in June… I did not expect the market to trade below these levels so quickly. This collapse came less than a week after the Fed raised rates to the expected 50bps.”
Finally, he stated that BTC and the broader cryptocurrency market still have tough times ahead and the LUNA collapse has only “advanced” things.