According to the former CEO of BitMEX crypto derivatives exchange, the recent 12% pullback in Bitcoin represented a "well-needed market cleansing" and local price bottom. Hayes stated "The price action played out as I expected" in a new blog post.

He believes Bitcoin has put in a local low around $58,600 and will now grind slowly higher over the next few months. Hayes forecasts BTC trading in a range between $60,000 to $70,000 until around August.

Drivers: Fed Liquidity and Post-Halving Dynamics Hayes pointed to several factors contributing to this week's BTC sell-off, including tax season, Fed policy concerns, the Bitcoin halving "sell the news" event, and a slowdown in spot ETF inflows.

However, he sees the 23% correction as just the fourth such retracement of similar magnitude over the past year. The key driver moving forward will be increasing dollar liquidity from the Federal Reserve's quantitative tightening taper and U.S. Treasury's debt issuance plans.

"The slow addition of billions of dollars of liquidity each month will dampen negative price movement from here on out," Hayes stated, describing it as "stealth money printing" that's ultimately positive for risk assets like crypto.

Sideways Accumulation Period Ahead Hayes' view aligns with other analysts calling for a sideways, accumulation period in crypto markets over the next few months following the recent sell-off.

Vailshire Capital founder Jeff Ross stated "the actual bull market hasn't even started yet" and said the coming weeks represent an opportunity to accumulate.

An institutional research note from Matrix Port echoed this sentiment, reiterating its outlook for Bitcoin to move mostly sideways for 4-5 months following its latest halving, based on historical patterns.

After bouncing around 4% on the day, Bitcoin trades just under $60,000 as of this writing. While off its recent highs, BTC remains up significantly in 2024 amid optimism the worst of this latest pullback has passed. Market observers will be watching if a grind higher emerges as predicted.