Former BitMEX CEO called the critical support levels for Bitcoin and Ethereum

According to Arthur Hayes, we can expect massive sell pressure in the spot markets when the $20 000 and $1 000 levels are broken

14.06.2022 - 12:50

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What’s new? Arthur Hayes, former head of the cryptocurrency exchange BitMEX, named critical support levels for bitcoin and Ethereum. In his opinion, these are the $20 000 and $1 000 marks, respectively. Hayes believes that after these levels are broken through, we can expect massive sell pressure in the spot markets as dealers hedge their bets.

4/ If these levels break, $20k $BTC & $1k $ETH, we can expect massive sell pressure in the spot markets as dealers hedge themselves. We can also expect that there will be some otc dealers and that will be unable to hedge properly and might go belly up.— Arthur Hayes (@CryptoHayes) June 14, 2022

What else does Hayes say? According to him, most of the open interest on Deribit's derivatives exchange has a strike price of $20 000 for bitcoin and $1 000 for Ethereum. And if you add large OTC positions (over-the-counter trading) to that, a failure of those levels would trigger a massive sell-off.

Strike price is the price of option execution, that is the value at which the underlying asset will be delivered or written off, if the buyer decides to execute the option.

As of June 14 at 13:00 UTC, bitcoin is trading at $22 170, Ethereum's price is $1199, according to Binance.

In early June, Hayes stated that bitcoin and Ethereum had already reached a local bottom. In his essay, Hayes traced the basic price cycles of the major cryptocurrencies and concluded that the rate of BTC would not fall below $25 000 and ETH below $1 700. In his opinion, market recovery should be expected at the moment when the US Federal Reserve System (Fed) stops raising its key rate.

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