Bitcoin [BTC] revisited its support levels of $91k for the fourth time this year, marking a 16% decline from its all-time high of $109.5K in January 2025.
Despite these setbacks, concerns surrounding BTC may persist, as highlighted by Arthur Hayes, the creator of BitMEX and Chief Investment Officer at crypto fund Maelstrom.
The Future of BTC
In a recent post on X (formerly Twitter), Hayes suggested that BTC could see a drop to $70K due to the unattractive ‘yield’ of CME Futures, potentially triggering unwinding by major funds.
Hayes presented a chart revealing that short-term U.S. treasuries currently offered a yield of 4.3%. However, the BTC CME basis has decreased following the U.S. elections, while ETH CME trading offered larger returns in comparison.
Last week, K33 Research analyst Vetle Lunde pointed out that the CME BTC Futures basis (monthly) had fallen to levels last witnessed before the bull market peak in late 2023.
For those unfamiliar, the Futures basis represents the difference between BTC Futures and spot index prices. A high positive value indicates bullish sentiment, while a declining or negative value suggests subdued or pessimistic sentiment.
On the other hand, Bitfinex analysts attributed BTC’s challenges to macroeconomic uncertainty, which also impacted the U.S. stock market.
“The downturn has been intensified by macro-driven uncertainty, alongside Bitcoin’s growing correlation with traditional markets.”
The analysts noted that the S&P 500 downturn had reduced risk appetite across various markets, including BTC.
Amid concerns and selling pressure, Chris Burniske, a partner at crypto VC Placeholder, maintained that the pullback was a typical mid-bull run reset as observed in 2021. He commented,
“In mid-2021, $BTC witnessed a 56% drawdown…You can cite various reasons for why this cycle may be distinct, but the ongoing mid-bull reset isn’t unprecedented.”
From a fundamental standpoint, BTC’s soaring levels above 2 on the Market Value to Realized Value ratio (MVRV) mirror a pattern akin to the early 2024 local peak.
If history repeats itself, a potential cycle peak could materialize if the MVRV reaches 3.
Nevertheless, breaching the $91K-$90K support that has held steady for the past three months would alter the market dynamics for the premier cryptocurrency.