BitMEX co-founder Arthur Hayes has revealed the closure of his Bitcoin short position, citing signs of a market recovery. Hayes now predicts a Bitcoin rally as US dollar liquidity rises, reversing his earlier bearish stance on the cryptocurrency’s price.

Arthur Hayes Shifts from Bearish to Bullish Stance

Arthur Hayes, a crypto billionaire, revealed the closure of his Bitcoin short position in an X post dated September 8. After previously predicting that Bitcoin's price would go below $50,000, he now anticipates that the market for cryptocurrencies will recover next week.

As recently observed by CoinGape, whales began purchasing dips when sentiment shifted towards a decline below $50,000.

The market oversight and announcement by Treasury Secretary Janet Yellen prompted the move. According to Hayes, the anticipation of increasing dollar liquidity would cause Bitcoin's price to gain upward momentum.

Peter Brandt Reverses Bitcoin Forecast

Furthermore, Peter Brandt also abandoned his earlier predictions that Bitcoin would hit a low of $46,000. In reaction to Peter Schiff's criticism of Bitcoin, seasoned trader Brandt stated that Bitcoin is bullish versus gold due to the emergence of a large inverted H&S pattern.

Notably, the level of "extreme fear" has decreased to "fear" in the cryptocurrency market during the past day, a modest improvement. In today's trading, the Crypto Fear & Greed Index rose from 23 to 29.

Institutional Investors Withdraw from Bitcoin ETFs

The impending release of the consumer price index (CPI) on Wednesday and the producer price index (PPI) on Thursday has crypto traders anxious about the future of the cryptocurrency market. In addition, institutional investors have pulled their money out of the spot Bitcoin ETF market, which has been struggling since September, with a net outflow of roughly $700 million last week.

Wall Street and economists anticipate a further cooling of the CPI to 2.6% from 2.9%. Interest rate cuts of 50 basis points (bps) by the FOMC are likely in September due to a weakening job market and falling inflation.

There is a 70% chance of a 25 bps rate drop in September, according to the CME Fed Watch tool. Plus, the Federal Reserve has decreased interest rates by a total of 100 basis points so far in 2018.

Bitcoin Likely to Benefit from Lower Treasury Yields

The US dollar index (DXY) has recovered to levels over 101, but the yield on 10-year Treasury notes has fallen to 3.716%, a level not seen in 15 months, as a result of a weakening job market. The Bitcoin price will benefit from this.