Arthur Hayes: There may be extreme market weakness in April, but liquidity will heat up after May, driving the crypto bull market

In his latest blog post "Heatwave", Arthur Hayes predicts that from mid-April to early May, U.S. taxation will drain market liquidity, coupled with the Federal Reserve's continued tapering, the market may become extremely weak. However, starting from May 1st, with the Fed slowing down its tapering speed and the U.S. Treasury Department using funds to stimulate the market, a new round of crypto bull market is expected to start. Hayes pointed out that the Fed has indirectly "transfused" for the banking system by relaxing bank capital requirements and other means, enabling it to hold more government bonds. The U.S. Treasury Department has also been issuing short-term government bonds to absorb trillions of dollars in idle funds in the Federal Reserve Bank's reverse repo tool. Both measures are conducive to enhancing market liquidity.

However, Hayes expects that a large amount of money will be withdrawn from the system due to tax deadline on April 15th . At same time ,the Fed continues its monthly $95 billion tapering . In addition ,the expected halving of Bitcoin block rewards on April 20 could lead to short-term overselling , putting tremendous pressure on markets .Hayes advises investors act cautiously in April and boldly deploy after May.He revealed he had already taken profits by closing positions in tokens like MEW,SOL,NMT,and transferred funds into USDe stablecoin on Ethena platform for collateralization.Hayes said if he can avoid losses risk in April ,he'll have plenty ammunition establish various crypto asset positions enjoy bull-market dividends come May.