WRONG: Arthur Hayes Wrongly Predicts $1,700 Low for Ethereum

Ethereum’s slow bleed turn into a hemorrhage over the weekend, crashing to $1,500 and humiliating BitMEX and 100x co-founder Arthur Hayes just days after he predicted it had reached a bottom.

The token’s price sank from Friday’s high of $1,800 down to $1,662 by the end of the day. As of Saturday, it had sunk to $1,500, and closed at $1,540, its lowest point in 16 months. The move came 10 days after Hayes predicted in a Medium article that Ethereum had reached a short-term bottom.

“Ether has experienced two cycles,” Hayes wrote in the June 1 post. “The first one started when the coin first freely traded after ICO distributions were made, and the second commenced after Ether bottomed following the 2017 / 2018 ICO boom then bust. “With a bit of fudging around the edges we can approximate a range that corresponds to what we believe is the local bottom. For Bitcoin, that’s $25,000 to $27,000. For Ether, that’s $1,700 to $1,800.”

The strike-out was a rare one for Hayes, who wrote in April that he had shorted bitcoin and Ethereum with puts priced at $30,000 and $25,000. Bitcoin fell from $47,000 that month to $27,000 in May, while Ethereum fell from $3,500 to less than $2,000.

Hayes’ June estimate was also a revision from his prediction a month earlier, when he wrote that he would become “a buyer at Bitcoin $20,000 and Ether $1,300,” because those levels corresponded to the “highs of each asset during the 2017/18 bull market.”

Explaining his unsuccessful prediction, Hayes wrote, “During this cycle, the secular bull market for now has held in both cases. And more importantly, the local low is quite close to the previous all-time high. That is encouraging because it means a sufficient amount of pain was felt by those who had to sell for one reason or another.”

Nonetheless, he acknowledged that prices were unlikely to move up quickly, and said they were dependent on macro conditions imposed by central banks, writing, “The politics must align with the macroeconomic environment to produce the catalyst for crypto to exit the current bear market. While the bottom is in (I hope), it doesn’t mean prices will automatically resume a quick ascent towards $70,000 and $5,000 for Bitcoin and Ether respectively.

“The market will stage impressive bear market rallies that traders nursing massive losses will sell into,” he added. “Right now, many traders are sitting on positions that are down 50% to 90%. These traders are in a loss reduction mindset. They want to exit at a less bad price. They are not mentally primed to ship more capital in at these ‘bargain’ prices. Therefore, any rally will be sold into, until the underbrush in the forest is clear and the diamond-handed apes can emerge safely from hibernation.”

Hayes, a 37-year-old billionaire, accepted two years of probation in May as part of a plea deal related to his role in crypto-exchange BitMEX. He successfully avoided a maximum sentence of 10 years in prison on charges that stemmed from failing to ask customers for their IDs.

Bitcoin as of Saturday was trading around $28,000, down from $30,000 earlier in the week and moving closer to Hayes’ more recent estimate.

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