Bitcoin Tracks Fed’s RRP, Mid-March Peak Expected | Airdrop Alert Pro

Former BitMEX CEO Arthur Hayes made a bold prediction for the cryptocurrency market, predicting a peak in mid-March 2025, followed by a sharp correction.

His prediction is based on an analysis of the dynamics of U.S. dollar liquidity and its impact on global financial markets, especially the cryptocurrency market.

The U.S. Treasury’s Role as Bitcoin Price Tracks Fed Suggested Retail Price

Hayes’ analysis hinges on two key components of U.S. dollar liquidity: the Federal Reserve’s reverse repurchase facility (RRP) and the U.S. Treasury’s General Account (TGA). He noted that since Bitcoin bottomed in the third quarter (Q3) of 2022, its price has largely followed the decline in MSRP. He believes this reflects increased liquidity in the market.

“As we head into 2025, the question on crypto investors’ minds is whether the Trump boost can continue,” Hayes said. wrote In his latest paper, Trump truth.

The Bitmex co-founder acknowledged the risk of market disappointment. He noted that there could be delays in implementation The Trump Administration’s Pro-Cryptocurrency Policies. He believes that the current US dollar liquidity environment is still favorable.

The Fed’s quantitative tightening (QT) policy reduces the balance sheet by $60 billion per month and will eliminate $180 billion in liquidity by the end of the first quarter of 2025. However, the Fed’s recent adjustment to the RRP rate is expected to result in a reduction in liquidity of $237. 100 million yuan in liquidity injection. This will offset the impact of QT and generate $57 billion in net positive liquidity.

Hayes highlighted Treasury’s key role in tackling the issue debt ceilingwith Treasury Secretary Janet Yellen Plans to implement “extraordinary measures” Provides funding for government operations from January 14th to 23rd. This approach would draw down the Treasury General Account (TGA), currently at $722 billion, temporarily increasing liquidity by halting new debt issuance until Congress raises the debt ceiling.

Based on historical spending patterns, Hayes predicts the TGA could be 76% depleted by March. Notably, this is consistent with his predicted market peak.

Hayes cited external factors raising risk levels

While U.S. dollar liquidity is at the core of his analysis, Hayes warned that other factors macroeconomic factors May affect cryptocurrency prices. These include potential shifts in China’s credit policy, adjustments by the Bank of Japan and unexpected moves by the Trump administration.

Still, Hayes remains confident in the math supporting his liquidity-driven predictions. He pointed out the correlation between the decline in RRP and the surge in Bitcoin prices since late 2022. He said these were evidence that liquidity was playing a leading role.

As part of his strategy, Hayes plans to increase exposure by investing in decentralized science (desi)project. Maelstrom, the investment fund he leads, has acquired the following tokens biologyVITA, ATH, GROW, PSY, CRYO and NEURON. These investments mark bets on the emerging DeSci narrative.

The statement reiterated his willingness to accept high-risk, high-reward opportunities. His enthusiasm reflects a broader trend of investors seeking niche industries with transformative potential. Still, Hayes acknowledged past forecast errors while stressing the importance of adjusting strategies based on new data.

Currently, Arthur Hayes is bullish on the near-term prospects of the cryptocurrency market. Still, he advised caution as the first quarter ended, suggesting a strategic retreat as dollar liquidity conditions tighten in the second quarter.

“Sell in the late first quarter and then cool off,” he advises.

All in all, Hayes’ liquidity-driven analysis provides a compelling roadmap for cryptocurrency investors in an uncertain macroeconomic environment. While the promise of a mid-March peak is tempting, he called for caution, reflecting volatility Inherent to the crypto market.

Hayes’ prediction is consistent with that of data analytics provider CryptoQuant. Contributor Crypto Dan Recent Highlight The ongoing bull market that began in January 2023 will likely peak in the first or second quarter of 2025. Dan’s analysis shows that 36% of Bitcoin traded in Q4 2024 was held for less than a month, mimicking patterns from previous market peaks.

“With an influx of new investment and additional capital from existing investors, it is reasonable to expect that the market is currently in the later stages of this cycle,” the post reads.

Still, he said Bitcoin and altcoins could still rise significantly before the market corrects. Crypto Dan urges caution in maturing cycles.