The crypto market's funding situation may face a major change! $ETH may first drop to $4000!
Arthur Hayes, the founder of BitMEX, recently discussed the Federal Reserve and the crypto market, and his views are quite pragmatic.
In simple terms, he believes there’s no need to focus on the Federal Reserve needing to cut interest rates; investment shouldn’t just bet on the assumption of 'a 50 basis point cut.' If Powell stubbornly refuses to lower rates, the government will certainly use other methods to adjust the money in the market, after all, there are many economic regulation tools available. If interest rates don’t work, other fiscal or monetary policy combinations will follow. This has a quite complex impact on the crypto market; funding doesn’t only look at interest rates but may also be indirectly influenced by other policies.
He also mentioned that the market might replay the 'disaster' of 2022. At that time, everyone was hoping for interest rate cuts, but Powell suddenly sent a strong signal, which directly led to a market crash. This indicates that the crypto market is particularly sensitive; most participants are speculative funds, and when policies deviate significantly from expectations, sentiment immediately reverses, and asset prices plummet. This risk still exists, as there will always be uncertainties in policies and expectations.
Specifically regarding ETH, if Powell makes strong statements at the Jackson Hole meeting, ETH may first drop to $4000. A strict policy means tightening, which decreases market risk appetite; investors may sell off risk assets, and ETH, being an important target, would be the first to bear the brunt. A drop to $4000 is not only a reflection of sentiment but may also trigger panic selling and leveraged liquidations, further exacerbating the decline.
Taking advantage of the speculation around interest rate cuts, the next wave will bottom out at an epic low, grab the trend! Expected 5-10 times!
