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Crypto Bloody Crypto - Arthur Hayes Predicts 40% Drop

PLUS - $DED Airdrop Info (Polkadot) and Conflux Review

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Good Morning from the Promptbox Team!

Its a mixed day in the market with slight retraces across various ecosystems and narratives with $OSMO and $TIA showing continued strength.

The pullback I called yesterday in $SEI is here and Im buying as indicators are still showing that its bullish (but that can flip any second).

Buy the dips yall.

Its January 5th. Lets get it.


TODAYS UNBOXING

  • READ: Arthur Hayes Predicts 40% BTC Correction

  • BIG STORY: Polkadots First Meme Coin

  • Fake Crypto CEO + other Web3 and crypto stories

  • Top Moving Coins (Bubble Edition)

  • What Am I Buying?

  • Reader Request: Conflux Network


January 5, 2024

I expect Bitcoin to experience a healthy 20% to 30% correction from whatever level it has attained by early March... I could easily see a 30% to 40% correction due to a dollar liquidity rug pull.

Arthur Hayes

Arthur Hayes, the co-founder of BitMEX, predicts a significant Bitcoin correction of 20% to 40% by March.

This forecast, based on a combination of economic factors and market dynamics, suggests a tumultuous period ahead for Bitcoin and potentially the broader cryptocurrency market.

Key Facts:

  • Major Correction Predicted: Hayes anticipates a 20%-40% drop in Bitcoin's value by March.

  • Factors Influencing Prediction: The prediction is based on various elements, including a potential banking collapse and a decline in the balance of the Reverse Repo Program (RRP).

  • Impact of Banking Sector: A collapse in the banking sector could lead the Federal Reserve to reduce interest rates, potentially causing Bitcoin to rebound after the correction.

  • Specific Dates Mentioned: Hayes expects the correction to begin around March 12 and plans to close his BTC put position by March 20, anticipating a market bottom by then.

  • Role of the Federal Reserve: The expiration of the Bank Term Funding Program (BTFP) on March 12 and the Federal Market Open Committee (FOMC) meeting on March 20 are critical dates in his forecast.

  • Contingencies for His Theory: Hayes acknowledges certain conditions that could invalidate his prediction in his essay, "Signposts."

Arthur Hayes' forecast of a significant correction in the Bitcoin market underscores the volatile nature of cryptocurrencies and their susceptibility to broader economic forces.

His analysis points to key dates and factors that could influence Bitcoin's trajectory, providing valuable insights for investors navigating the uncertain crypto landscape.

As the predicted dates approach, the market's response to these developments could offer critical indicators of the evolving relationship between digital assets and traditional financial systems.


Take a look at the full story below.

My Take:

While Arthur Hayes' prediction of a significant Bitcoin correction by March seems well-founded, there's an additional aspect to consider: the activity surrounding Tether (USDT) printing. Historically, fluctuations in USDT supply have often served as a bellwether for Bitcoin's price movements. An increase in USDT issuance typically signals incoming liquidity, possibly driving up crypto prices, whereas a slowdown could suggest the opposite. As such, keeping a close eye on USDT printing in the coming weeks could provide further insight into the market's direction.

Moreover, Hayes' forecasted March 12 correction timing intriguingly aligns with the upcoming Bitcoin halving in April. This event historically acts as a catalyst for substantial market movements. A March dip could very well set the stage for a significant rebound post-halving, offering a prime opportunity for retail investors.

It's not just Bitcoin that's worth watching; altcoins, often more volatile, could experience drops exceeding 50%, presenting attractive entry points for buyers aiming to capitalize on FOMO-driven rallies.

Top Web3 and Crypto Stories of the Day

$DED Captures Attention as Polkadots First Meme Coin (and Promise of Free Airdrop)

The Polkadot community has joined the memecoins craze, welcoming $DED with open arms - most likely because its free for holders.

Get your $DOT off exchanges and into your wallets to be eligible

Why is the Market Red(ish)?

Analysis: There is still very little retail volume at play and traders were anticipating an earlier than expected BTC ETF approval.

As if.

Nothing has changed and its the end of the week so US investors are starting to take their profits off the table.

All eyes are on next week but remember to buy the news (in moderation) and sell the launch.

Even when approved next week it will still take anywhere from 4 days to 2 months to launch the ETF. Historically within 48 hours after that is the time to start taking profits.

What Am I Buying?

Not Financial Advice

Not buying anything today until the market picks a lane.

I will be watching the trending coins on coingecko and potentially picking up something with the most blood in the water.

What am I selling? $LINK

It flipped bearish over multiple timeframes and as you can see from the chart below its been mostly ranging for the last 6 months with market makers just pumping and dumping it within a consolidated model.

I should have done this earlier but Ill be selling my bags and putting that into $TIAand selling at the first hint of bearishness or $22, whatever comes first.

Reader Request: Conflux Network ($CFX)

An oldie but a goodie. I had a bag of this about 6 months ago and its an overall strong project with tens of millions of dollars invested by prominent VCs, as well as a China Only narrative that will most likely come back in 2024 or 2025.

While its bearish on the 1D and 4H, RSI is showing it as oversold as it can be.

If youre looking to sell: hold
If youre looking to buy: wait/DCA

It looks like its going to turn bullish soon and a DCA will provide you a solid average but until it flips it still has room to dump.

If you want me to drop a chart in an upcoming issue send me an email at [email protected]

If you have anything interesting to share, question to ask, or want to reach out, shoot us an email at [email protected]

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