Roundup: Mobius Capital Founder Says BTC Market Is Hurting S&P 500, Fidelity Exec Argues BTC Is Oversold and more

The bear market has hardened its grip on cryptocurrencies, with Bitcoin falling to 2020 levels in prices. The daily liquidation volume in the last five days has been consistently more than $300 million, the largest 24 hr. volume of $1.154 billion recorded on June 13.

Arthurs Hayes foresees extensive selloffs if BTC breaks $20,000

The worst is, however, yet to come, according to BitMEX's Arthur Hayes, who opines that the going could get tougher should lead assets Bitcoin and Ether break respective supports of $20,000 and $1,000.

Hayes, referencing data from DeFi tracking platform Parsec, warned that even more significant sell-offs could happen following a week of liquidations of the several borrowers who've become unable to meet their obligations. The former crypto exchange executive explained in a Twitter post that breaking said levels would likely push dealers to hedge themselves as sell-side pressure on BTC and ETH increases.

Particularly, he's watching options flows; both listed and unlisted, which he says have massive open interest. He adds that some OTC dealers may also be dragged down and forced to sell their tokens in the bear market, owing to substantial structured products around that price.

Fidelity Investments executive suggests Bitcoin is oversold and undervalued

Despite market sentiment predominantly being negative and the majority of analyst views bearish-inclined, some still see a ray of optimism in the market. Fidelity Investments Director of Global Macro Jurrien Timmer while remarking on the lead virtual asset, Bitcoin, suggested that there's still potential that the token could rebound upwards as some of its metrics remain solid.

Timmer explained via a recent Twitter thread that on-chain technicals show Bitcoin to be undervalued at the current price levels. The Fidelity director pointed to the price-to-network ratio, which he noted to be in sync with 2017 and 2013 numbers despite prices having only reversed back to late 2020 numbers. This, he argued, meant Bitcoin is cheaper than it looks.

The Fidelity executive added that Bitcoin's count of non-zero addresses overlayed against the current token price verifies this claim further. He also shared another chart (of Bitcoin dormancy) demonstrating that this metric has fallen to levels as low as 2011, leading to the conclusion that it is technically oversold.

Such optimistic comments add to those recently made by Fidelity's CEO Abigail Johnson, who said that bear crypto markets provide the best periods to double down investments from a long-term perspective.

The S&P 500 is feeling the pain of an unstable Bitcoin, says Mark Mobius

Founding partner of Mobius Capital, Mark Mobius, has observed that the S&P 500 is bearing the brunt of Bitcoin's decline in the market. In an interview with CNBC, Mobius said that the recent indecisiveness of crypto markets, specifically Bitcoin, leaves the S&P 500 disadvantaged, owing to the high correlation between the two.

He sees it as the case of “a tail wagging the dog,” meaning the S&P 500 could decline below the losses it's already sitting on for the year as investors continue to relinquish their crypto holdings. The veteran trader added that the billions in value of investment placed in cryptocurrencies and the large number of users following the asset class breed a perceptible psychological impact.

This is what Mobius believes is causing this unusual kind of behavior, in which Bitcoin goes down, and the S&P follows, explaining that the stocks' fall being instant indicated a state of panic. Overall, the recent behavior continues to unwind the suggestion of crypto as a hedge against inflation.

To learn more about Bitcoin visit our Investing in Bitcoin guide.