- Arthur Hayes of Maelstrom warned that Bitcoin’s rally might be a ‘dead cat bounce’ as it has not fully decoupled from U.S. software stocks.
- Bitcoin’s price reached nearly $74,000 on Wednesday before pulling back to around $72,400.
- Despite concerns, retail sentiment for Bitcoin on Stocktwits turned ‘extremely bullish,’ while sentiment for the software ETF IGV remained bearish.
On Wednesday, Arthur Hayes, co-founder of Bitmex, issued a cautionary statement on social media platform X. He suggested Bitcoin’s recent surge may be a fleeting recovery before another potential decline.
Hayes wrote “It could be a dead cat bounce. We aren’t in the clear yet. Be patient.” His analysis hinges on Bitcoin’s ongoing correlation with U.S. software technology stocks. Consequently, he believes the cryptocurrency’s next major breakout depends on Federal Reserve monetary policy shifts.
Bitcoin’s price action showed volatility, hitting an intraday high near $74,000 for the first time since early February. However, it later pared gains to trade around $72,400 on Wednesday night. Meanwhile, the iShares Expanded Tech-Software Sector ETF saw modest gains in regular trading but lagged behind Bitcoin’s performance.
Retail investor sentiment, as tracked by Stocktwits, painted a contrasting picture for the two assets. Sentiment around Bitcoin rose to ‘extremely bullish,’ while sentiment for the software ETF remained in ‘bearish’ territory. This divergence highlights the mixed market outlook among individual traders.
Some users on the platform expressed caution, comparing Bitcoin’s current move to a bull trap seen in 2022. Both Bitcoin and the IGV software ETF remain down year-to-date, by 17% and 19% respectively. Hayes maintains a long-term price target between $500,000 and $750,000 for Bitcoin by year’s end.
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