Bitcoin has dropped below $77,000 for the first time since November 10, briefly hitting $76,822 before recovering to around $79,000.
The cryptocurrency has now fallen 30% from its all-time high of $110,000, while traditional markets are also struggling. Arthur Hayes, co-founder of BitMEX, advises investors to remain patient, calling the correction a regular event in a bull market.
Bitcoin decline and broader market losses
Hayes predicts Bitcoin may bottom out at $70,000, representing a 36% correction. He believes the cryptocurrency will not recover on its own. He suggests that before a rebound occurs, stock market turmoil, a significant financial institution collapse, and renewed central bank intervention are necessary.
BTC price chart. Source: Jai Hamid/TradingView
The stock market has also suffered steep declines. The Nasdaq 100 dropped 1,050 points in one day, marking a 5.8% loss, while after-hours trading saw another 300-point drop. The S&P 500 and Dow Jones both declined, with the Dow falling below its 200-day moving average for the first time since November 2023. Delta Air Lines saw an 11% drop after lowering its profit and sales forecast due to weak U.S. travel demand. Market strategist Anastasia Amoroso noted that the current conditions resemble a capitulation event, with stocks reaching oversold levels.
SPX S&P 500 Index chart. Source: TradingView
Bitcoin criticism and economic uncertainty
Peter Schiff, a well-known critic of Bitcoin, questioned its viability as a reserve asset. He pointed out that Bitcoin’s rapid decline raises concerns about its long-term stability. He also argued that financial instability could push the U.S. to focus on reviving manufacturing jobs.
Source: Farside
Investors are now watching key economic reports scheduled for release this week, including the Job Openings and Labor Turnover Survey, the Consumer Price Index, and the Producer Price Index. These reports could influence the Federal Reserve’s interest rates and inflation control stance.
Bitcoin ETF outflows and market sentiment
For the fourth week in a row Bitcoin ETFs experienced steady withdrawals exceeding $867 million. No fewer than four working weeks in a row have shown decreasing Bitcoin ETF funds with a cumulative outflow of $4.75 billion. Bitcoin hit an intermediate low of $80,000 during the weekend period when the general cryptocurrency market showed signs of weakness.
The economic situation represents a “period of transition” according to Donald Trump and Scott Bessent predicts a financial readjustment would occur with federal spending declines. Various experts agree that central banks should perform market stabilization through intervention according to Hayes’ prediction to maintain market stability and authority. Traders should wait according to his current recommendation.