Bitcoin and Ethereum slumped by double-digit percentages weekly after tapping multi-month highs last weekend. This resulted in over $150 billion gone from the entire market cap.
Somewhat expectedly, the Fear and Greed Index has returned to a state of fear, but BitMEX’s co-founder – Arthur Hayes – believes this retracement could be an opportunity to stack up.
Time to Buy, Says Hayes
In its latest Twitter thread on the price actions in the crypto market, the former BitMEX executive began by asking his nearly 300K followers whether they have a short-term or a long-term strategy in regard to investing in digital assets.
If they are here for the short-run, then the price action is “ugly.” In the opposite situation, “it could mean you read the market wrong.” In this case, investors have three options, according to Hayes – to “cover, sit tight, or add more.”
He believes that only those who had their investment thesis changed fundamentally should leave the market. Giving an example with Ethereum and the Merge, he asserted that if the long-anticipated event gets canceled for some reason, that will make him worried about his position.
Since this is not the case, and the Merge is still scheduled to undergo in the next several weeks, Hayes remains a believer in the second-largest blockchain protocol and suggested that “it might be time to go shopping.”
If something critical happened to decrease the probability of a successful merge, I would expect the ETH/BTC cross to fall much lower than 0.079 given it has advanced off of a 0.05 local low in mid-June. pic.twitter.com/lUrkNshhzT
— Arthur Hayes (@CryptoHayes) August 19, 2022
The Merge Will Rally ETH
Hayes seems indeed quite bullish on the Merge – the event that will finally see Ethereum transition from the energy-intensive PoW to the more nature-friendly PoS. In a recent blog post, the BitMEX co-founder said he believes there could be a sell-the-news moment, meaning that the price could retrace in the short term, but it would be ultimately positive for long-term investors.
He compared the Merge to the Bitcoin halving and suggested that ETH could rally in the same fashion as BTC has done in the past.
“If the merge is successful… traders will buy ETH today, knowing that the higher the price goes, the more the network will be used and the more deflationary it will become, driving the price higher, causing the network to be used more, and so on and so forth,” he explained. “This is a virtuous circle for bulls.”