Crypto analyst Tony Severino has warned that the Bitcoin price risks a further crash. This came as he revealed a critical technical indicator, which has turned bearish for the flagship crypto, although he noted that BTC bulls can still invalidate this current bearish setup. 

Bitcoin Price At Risk Of Further Crash As S&P Monthly LMACD Turns Bearish

In an X post, Severino indicated that the Bitcoin price could crash further as the S&P 500 monthly LMACD has begun to cross bearish and the histogram has turned red. This development is significant as IntoTheBlock data shows that BTC and the stock market still have a strong positive price correlation.  

Related Reading

The crypto analyst stated that BTC bulls can turn this bearish setup for the Bitcoin price in the next 20 days, as diverging would lead to a bullish setup instead. However, the Bulls’ failure to turn this around for Bitcoin could lead to a massive decline for the flagship crypto, worse than it has already witnessed. 

Severino stated that a confirmation of this bearish setup at the end of the month could kick off a bear market or Black Swan type event similar to what happened when the last two crossovers occurred. It is worth mentioning that BTC has already crashed to as low as $76,000 recently, sparking concerns that the bear market might already be here. 

However, crypto experts such as BitMEX co-founder Arthur Hayes have suggested that the bull market is still well in play for the Bitcoin price. Hayes noted that BTC has corrected around 30% from its current all-time high (ATH), which he remarked is normal in a bull run. The BitMEX founder predicts that the flagship crypto will rebound once the US Federal Reserve begins to ease its monetary policies. 

BTC Still Looking Good Despite Recent Crash

Crypto analyst Kevin Capital has suggested that the Bitcoin price still looks good despite the recent crash. In his latest market update, he stated that BTC remains the best-looking chart and that everything is going according to plan for the flagship crypto. The analyst predicts that Bitcoin could still come down and test the range between $70,000 and $75,000, which he claims would still be completely fine. 

Related Reading

Kevin Capital remarked that the Bitcoin price could remain afloat if it holds a key market structure and the 3-day MACD resets. He added that some decent macro data could help the flagship crypto stay above key support levels. The US CPI data will be released today, which could provide some relief for the market if it shows that inflation is slowing. The analyst is confident that one good inflation report and the FOMC can help turn the tides. 

At the time of writing, the Bitcoin price is trading at around $81,860, up over 2% in the last 24 hours, according to data from CoinMarketCap.

Featured image from Adobe Stock, chart from Tradingview.com

Arthur Hayes, BitMEX co-founder and major ether (ETH) holder, asked Ethereum co-founder Vitalik Buterin to rollback the network in order to assist hacked exchange Bybit, which lost nearly $1.4 billion in ether (ETH) on Friday.

“@VitalikButerin will you advocate to roll back the chain to help @Bybit_Official. My own view as a mega $ETH bag holder is $ETH stopped being money in 2016 after the DAO hack hardfork. If the community wanted to do it again, I would support it because we already voted no on immutability in 2016 [wh]y not do it again?” Hayes said on X.

Buterin was yet to reply as of time of publication.

The Bybit hack came into light on Friday when on-chain analyst ZachXBT noted suspicious outflows of over $1.4 billion from the exchange, with the attacker quickly swapping mETH and stETH for ether through a decentralized exchange.

The attacker then split 10,000 ETH to 39 different addresses and another 10,000 ETH to nine addresses, Gautham Santhosh, co-founder of Polynomial.fi, explained on X.

Bybit CEO Ben Zhou said that the hacker “took control of the specific ETH cold wallet and transferred all the ETH in the cold wallet to this unidentified address.” Zhou confirmed that the exchange “is solvent even if this hack loss is not recovered.”

One of the potential ways to address hacking is to roll back the blockchain. It involves reverting the blockchain to a state before the occurrence of a specific event, in this case, the hack. That way, malicious transactions resulting from the hack can be erased, effectively restoring lost or stolen funds. Implementing a rollback requires consensus from the network participants.

For instance, in 2016, the Ethereum network was rolled back using a hard fork to reverse a theft of $60 million in ether from The DAO (30% of all ETH in circulation back then). The hard fork split the chain into two – Ethereum and Ethereum Classic.

In 2019, Binance’s CEO Changpeng Zhao and his team considered pushing for a rollback on the Bitcoin network following a $40 million hack. However, the Bitcoin mining community criticized the idea of going back against the principle of decentralization and immutability, which are fundamental to blockchain technology.

Immutability is a security feature that prevents data from being changed after it’s added to the blockchain to make it trustworthy and tamper-proof. There are similar concerns regarding a potential Ethereum rollover.

“I wish we could roll back for the Bybit hack, I’m not against the idea. But the DAO hack was 15% of ETH with a clean recovery path. Today, a rollback would break bridges, stablecoins, L2s, RWAs and so much more. ETH ecosystem is just too interconnected now for a clean solution like 2016,” Santhosh said.

Sina 21st Capital explained that Ethereum is now stuck between a rock and a hard place.

“Ethereum is toast. They can roll back the chain and destroy what is left of the decentralization claim or allow North Korean baad actors to keep $1.4B of ETH and unleash an eternal internal battle. Either way, it is terrible,” Sina 21st Capital said on X.

Ether has dropped nearly 3% in 24 hours, but continues to trade rangebound between $2,600 and $2,800, CoinDesk data show.

Arthur Hayes, the Chief Investment Officer at Maelstrom and co-Founder as well as former CEO of BitMEX, has published a new essay titled “The Ugly,” in which he contends that Bitcoin could be poised for a profound near-term pullback before ultimately marching to unprecedented highs. While retaining his characteristic bluntness, Hayes lays out two scenarios when to buy Bitcoin.

Buy Bitcoin If This Happens

Hayes’ essay begins by recounting a sudden shift in sentiment that caught him off guard. Comparing financial analysis to backcountry skiing on a dormant volcano, Hayes recalls how the mere hint of avalanche danger once forced him to stop and reassess. He expresses a similarly uneasy feeling about current monetary conditions, an intuition he says he last felt in late 2021, right before the crypto markets collapsed from their record highs.

“Subtle movements between central bank balance sheet levels, the rate of banking credit expansion, the relationship between the US 10-yr treasury/stocks/Bitcoin prices, and the insane TRUMP memecoin price action produced a pit in my stomach,” he writes, emphasizing that these signals collectively remind him of the market’s precarious situation prior to the 2022 and 2023 downturns. He clarifies that he does not believe the broader bull cycle is finished, but he anticipates that Bitcoin could drop to somewhere around the $70,000 to $75,000 range before rallying sharply to reach $250,000 by year’s end.

Related Reading

He describes this range as plausible given that equity markets and treasury markets appear, in his words, deeply entangled in a “filthy fiat” environment still grappling with the vestiges of inflation and rising interest rates. Hayes points out that Maelstrom, his investment firm, remains net long while simultaneously raising its holdings in the USDe stablecoins to buy back Bitcoin if price falls below $75,000.

In his view, scaling back risk in the short term allows him to preserve capital that can later be deployed when a genuine market liquidation occurs. He identifies a 30% correction from current levels as a distinct possibility, while also acknowledging that the bullish momentum could continue. “if Bitcoin trades through $110,000 on strong volume with an expanding perp open interest, then I’ll throw in the towel and buy back risk higher,” he writes on his second scenario.

In attempting to decipher why a temporary pullback might happen, Hayes asserts that major central banks—the Federal Reserve in the United States, the People’s Bank of China, and the Bank of Japan—are either curbing money creation or, in some cases, outright raising the price of money by permitting yields to rise. He believes that these shifts could choke off speculative capital that has elevated both stocks and cryptocurrencies in recent months.

His discussion of the US focuses on two interlocked perspectives: that ten-year treasury yields could rise to a zone between 5% and 6%, and that the Federal Reserve, while hostile to Donald Trump’s administration, will not hesitate to reinitiate printing if it becomes essential to preserve American financial stability.

Related Reading

However, he believes that at some point, the financial system will need an intervention—most likely an exemption to the Supplemental Leverage Ratio (SLR) or a new wave of quantitative easing. He contends that the reluctance or slowness of the Fed to take these steps increases the probability of a near-term bond market sell-off, which could weigh on equities, and by correlation, Bitcoin.

His political analysis homes in on the lingering enmity between Trump and Federal Reserve Chair Jerome Powell, as well as the Fed’s willingness to forestall a crisis during the Biden presidency. He cites statements from former Fed governor William Dudley and references Powell’s press conference remarks that suggested the Fed might alter its approach based on Trump’s policies.

Hayes describes these tensions as a backdrop for a scenario in which Trump might allow a mini-financial crisis to unfold, forcing the Fed’s hand. Under such stress, the Fed would have little choice but to prevent a broader meltdown, and monetary expansion could then follow. He suggests that it would be politically expedient for the Trump administration to permit yields to surge to crisis levels if it meant that the Fed would be compelled to pivot into the large-scale money printing that many in crypto circles expect.

China, Hayes remarks, had seemed poised to join the liquidity party with an explicit reflation program until a sudden U-turn in January, when the PBOC halted its bond-buying program and allowed the yuan to stabilize in a stronger position. He attributes this policy change to internal political pressures or possibly strategic maneuvering for future negotiations with Trump.

Hayes also acknowledges that some readers might find the correlation between Bitcoin and traditional risk assets perplexing, given the long-term argument that Bitcoin is a unique store of value. Yet he points to charts showing a rising 30-day correlation between Bitcoin and the Nasdaq 100.

In the short term, he says, the leading cryptocurrency remains sensitive to changes in fiat liquidity, even if the coin ultimately trades on an uncorrelated basis over extended time horizons. He thus portrays Bitcoin as a leading indicator: if bond yields spike and equity markets tumble, Bitcoin could begin its dive before tech stocks follow. Hayes thinks that once authorities unleash renewed monetary stimulus to quell volatility, Bitcoin would be the first to bottom out and rebound.

He admits that predicting exact outcomes is impossible and that any investor must play perceived probabilities rather than certainties. His decision to hedge is derived from the concept of expected value. If he believes there is a substantial chance of a 30% pullback versus a smaller probability that Bitcoin will continue higher before he decides to buy back in at a 10% premium, reducing exposure still yields a better risk-reward ratio.

“Trading isn’t about being right or wrong,” he emphasizes, “but about trading perceived probabilities and maximizing expected value.” He also underscores that this protective stance allows him to wait for the kind of dramatic liquidation move in altcoins that often accompanies a short-term Bitcoin collapse, a scenario he calls “Armageddon” in the so-called “shitcoin space.” In such circumstances, he wants ample funds available to pick up fundamentally sound tokens at severely depressed prices.

At press time, BTC traded at $102,530.

Featured image created with DALL.E, chart from TradingView.com