Former BitMEX CEO Arthur Hayes recently expressed optimism about Bitcoin's future trajectory, suggesting that the recent market downturn signifies a local bottom, with Bitcoin poised for a steady increase over the forthcoming months. Hayes outlined his views in a blog post on May 3, attributing the recent decline to various factors, including the US tax season, concerns regarding Federal Reserve policies, the "sell the news" phenomenon following the Bitcoin halving, and a slowdown in spot Bitcoin ETF inflows.

Despite these challenges, Hayes maintains confidence in Bitcoin's resilience, referring to the 12% retreat this week as a "much-needed market cleansing." According to Hayes, Bitcoin hit a local low of around $58,600 earlier in the week before bouncing back above the $60,000 threshold. He anticipates Bitcoin will maintain a range between $60,000 and $70,000 until August, with a gradual upward trend fueled by increased dollar liquidity resulting from the Federal Reserve's quantitative tightening (QT) taper and the US Treasury's debt issuance plans.

Hayes described this process as "stealth money printing," which is expected to inject more liquidity into the markets, potentially benefiting riskier assets like cryptocurrencies. He believes that the slow addition of billions of dollars of liquidity each month will mitigate negative price movements, stabilizing Bitcoin prices before a gradual ascent. At the time of reporting, Bitcoin prices had recovered by 4.2%, trading at $59,804, though still down 19% from its mid-March all-time high.

Despite ongoing uncertainties in the crypto market, Hayes' outlook suggests cautious optimism, with Bitcoin poised for a gradual recovery in the coming months. Hayes also offered insights into upcoming US Treasury policy decisions led by Secretary Janet Yellen, predicting their potential impact on market liquidity and the subsequent rallies in both crypto and stock markets. He outlined three potential options, each capable of injecting significant liquidity ranging from $400 billion to $1.4 trillion into the financial system, emphasizing Yellen's pivotal role in these potential developments.

As anticipation mounts within the financial community regarding the Treasury's next policy announcement, analysts remain divided on the feasibility and consequences of such actions, highlighting the importance of closely monitoring these developments for their potential influence on global markets.