Arthur Hayes: The market may experience extreme weakness from April 15 to May 1, followed by a new round of crypto bull market

PANews On April 9, BitMEX co-founder Arthur Hayes stated in his latest blog post that from April 15 (the tax due date for the 2023 tax year) to May 1, legal currency fund flows are concentrated in the United States and the Federal Reserve. The quantitative tightening (QT) program and the Treasury General Account (TGA), the unstable period for risk assets is from April 15 to May 1, and the market may experience extreme weakness. However, starting from May 1, as the Federal Reserve slows down its balance sheet reduction and the U.S. Treasury Department uses funds to stimulate the market, a new round of crypto bull market is expected to begin.

Hayes pointed out that the Federal Reserve has provided a disguised "blood transfusion" to the banking system by relaxing bank capital requirements, allowing it to hold more government bonds. The U.S. Treasury Department has also been issuing additional short-term Treasury bonds to absorb trillions of dollars of idle funds in the Federal Reserve Bank's reverse repurchase facility. Both of these measures will help improve market liquidity. However, Hayes expects the April 15 tax deadline to take a lot of money out of the system. At the same time, the Federal Reserve continues to reduce its balance sheet by $95 billion per month. In addition, Bitcoin's expected block reward halving on April 20 may cause short-term oversoldness, which will put tremendous pressure on the market.

Hayes advises investors to be cautious in April and bold in May. He revealed that he would not be a complete guest in the market, but he had closed positions on tokens such as MEW, SOL, and NMT to make profits, and transferred the funds to the USDe stablecoin on the Ethena platform for pledge. Hayes said that if he can avoid the risk of losses in April, he will have sufficient ammunition to deploy in May and be ready for the real start of the bull market.