Former BitMEX CEO Arthur Hayes conveyed optimism about Bitcoin’s future trajectory, indicating that the recent downturn could signify a local bottom, with the leading cryptocurrency poised for a gradual climb in the coming months.

In a blog post on May 3, Hayes outlined various factors contributing to the recent market decline, including the US tax season, concerns over Federal Reserve policies, the "sell the news" effect following the Bitcoin halving, and a slowdown in spot Bitcoin ETF inflows.

Despite these challenges, Hayes expressed confidence in Bitcoin’s resilience, viewing the 12% retreat this week as a "much-needed market cleansing."

Hayes noted that Bitcoin hit a local low of around $58,600 earlier in the week before bouncing back above the $60,000 threshold. He anticipates Bitcoin to trade within a range of $60,000 to $70,000 until August, with a gradual uptrend driven by increased dollar liquidity resulting from the Federal Reserve’s quantitative tightening (QT) taper and the US Treasury’s debt issuance plans.

According to Hayes, this "stealth money printing" is expected to inject more liquidity into the markets, potentially benefiting riskier assets like cryptocurrencies.

He added that Bitcoin prices are likely to stabilize before embarking on a gradual ascent.

At the time of reporting, Bitcoin prices had rebounded by 4.2%, trading at $59,804. However, the cryptocurrency remained down 19% from its mid-March all-time high, based on CryptoSlate data.

While uncertainties persist in the crypto market, Hayes' outlook suggests cautious optimism, with Bitcoin poised for a gradual recovery in the coming months.

Hayes also recently speculated that upcoming US Treasury policy decisions led by Secretary Janet Yellen could significantly impact market liquidity, potentially sparking rallies in both crypto and stock markets.

He outlined three potential options for the Treasury, each capable of injecting substantial liquidity into the financial system, ranging from $400 billion to $1.4 trillion. These options include zeroing out the Treasury General Account balance, shifting to short-term borrowing via Treasury bills, or a combination of both.

Hayes emphasized Yellen’s pivotal role in these potential developments and predicted positive market reactions, although analysts remain divided on the feasibility and consequences of such actions. As the Treasury’s next policy announcement approaches, anticipation mounts within the financial community regarding the potential influence of these decisions on global markets.