Arthur Hayes: Extreme market weakness may occur in April, and the increase in liquidity after May will drive the crypto bull market

BitMEX co-founder Arthur Hayes predicted in his latest blog post "Heatwave" that from mid-April to early May, US taxation will withdraw market liquidity, coupled with the continued reduction of the Federal Reserve's balance sheet, the market may become extremely weak. However, starting from May 1st, with the Federal Reserve slowing down the speed of balance sheet reduction and the US Treasury using funds to stimulate the market, a new round of crypto bull market is expected to begin. Hayes pointed out that the Federal Reserve has indirectly "blood transfused" the banking system by relaxing the capital requirements for banks, allowing them to hold more government bonds. The US Treasury has also been issuing short-term government bonds to absorb trillions of dollars of idle funds in the Federal Reserve's reverse repo tool. Both of these measures are beneficial to improving market liquidity. However, Hayes expects that the April 15th tax deadline will withdraw a large amount of funds from the system. At the same time, the Federal Reserve is still reducing its balance sheet by $95 billion per month. In addition, the expected Bitcoin block reward halving on April 20th may bring short-term overselling, which will bring huge pressure to the market. Hayes advises investors to be cautious in April and to deploy boldly after May. He revealed that he has already closed positions and made profits on tokens such as MEW, SOL, and NMT, and transferred funds to the Ethena platform's USDe stablecoin for pledging. Hayes said that if he can avoid the risk of losses in April, he will have sufficient ammunition in May to establish various positions of crypto assets and fully enjoy the benefits of the bull market.