Crypto in 'Extreme Fear' as Bitcoin Poised for Potential Sub-$50K Weekend

Crypto in 'extreme fear' as Arthur Hayes tips 'sub $50K' Bitcoin weekendBitcoin's price drop saw crypto market sentiment hit “extreme fear,” and BitMEX co-founder Arthur Hayes thinks BTC could go lower over the weekend. This sentiment shift follows Hayes' recent warnings about Bitcoin's potential to fall to $50,000 in a worst-case scenario.Hayes, in his latest article titled “Boom Times… Delayed,” expressed a cautious outlook on Bitcoin and the broader cryptocurrency market. He attributed the decline to macroeconomic factors and policies of the Federal Reserve, particularly the rising Reverse Repo Program (RRP). The RRP, a tool used by the Fed to manage short-term interest rates and control the money supply, has been increasing, leading to tighter liquidity conditions in the market. This has historically pressured Bitcoin's price downward.Hayes believes that if the Federal Reserve does not cut interest rates before its September 18 meeting, BTC could continue its downward trend. He also warned that as Bitcoin drops, altcoins may suffer even more, potentially leading to an altcoin “capitulation,” where prices fall sharply.Despite his short-term bearish outlook, Hayes remains optimistic about the long-term potential of both Bitcoin and select altcoins. He plans to buy altcoins at lower prices during the expected dip, focusing on what he calls “solid shitcoins” with real value. He has previously shown interest in tokens like Etherna and Pendle.Looking ahead, Hayes predicts a strong rebound for Bitcoin by late September. He ties this to an expected Federal Reserve rate cut, which he believes will inject liquidity back into the market and drive up the prices of risk assets like Bitcoin. Hayes estimates that the Fed will reduce the interest rate to a range between 5% and 5.25%, sparking renewed interest in cryptocurrencies.If his prediction holds, Hayes believes Bitcoin could not only recover but also set the stage for a more significant bull run. He envisions Bitcoin reclaiming $70,000 and Ethereum soaring to $4,000, potentially igniting a broader altcoin rally.Hayes' latest forecast marks a significant departure from his earlier prediction just last month, in which he anticipated Bitcoin rising to $100,000 by the end of the year. However, he remains long-term bullish on Bitcoin, emphasizing that he is not selling his crypto holdings but remains poised to buy more at opportune moments.The current market sentiment, characterized by “extreme fear,” underscores the volatility and uncertainty in the crypto market. Investors are closely watching the Federal Reserve's actions and the RRP's impact on liquidity conditions to gauge the direction of Bitcoin's price.Bitcoin was trading at $58,032 at press time, reflecting a 0.18% drop over the past 24 hours. The market's reaction to the Fed's upcoming decisions and the RRP's trajectory will be crucial in determining whether Bitcoin's price will continue to slide or rebound.