Arthur Hayes Keeps Bitcoin (BTC) Bearish Call as Dollar Liquidity Index Rises 4.49%

Liquidity Index Nears Its High, Call Unchanged

Bitcoin (BTC) weakness would persist until the Federal Reserve or commercial banks expand their balance sheets, and until that happens Arthur Hayes is not calling a bottom. The BitMEX co-founder repeated his bearish outlook on Tuesday, saying the Bitcoin (BTC) price has no reason to turn while the condition stands. The dollar liquidity measure he publishes, the USDLIQ U index, has risen 4.49% year to date, a gain of roughly 1.406 million points that places the series near 32.71 million. The chart attached to his remarks marks a yearly high near 32.90 million and a low near 31.27 million, which leaves the current reading about 190,000 points below the peak. The commentary accompanying that chart flagged the tension directly: the index has moved close to its yearly high, yet Hayes still expects weakness. A slow rebound in the index is not, on its own, enough to change his position, because a rising liquidity reading and a turn in Bitcoin's direction are not the same event. On that reading, the 4.49% rise supports his data but not his conclusion, and he has kept the call anyway. Nothing in his remarks set a level, a date or a percentage that would flip him to the other side. The part of his condition that drew the most attention is the phrase “or banks”. A balance sheet is the table of an institution's assets and liabilities, and expanding one usually means assets and liabilities grow together. The commentary read the wording as covering two channels: bank reserves, the funds commercial banks hold at the central bank, and the credit channel, in which bank lending feeds money supply. Hayes is not asking only for the Fed to ease. His call expires when either the central bank or the banking system adds balance-sheet capacity, and not before.

TGA Rise and the September Balance-Sheet Premise

Hayes's liquidity framing reaches beyond the index itself and back through the year's policy record. The US Treasury General Account (TGA), the account the Treasury keeps and manages at the Federal Reserve, featured in his earlier reasoning: the TGA balance rose by $200 billion in January, and he cited that build-up as a backdrop in which Bitcoin (BTC) and dollar liquidity contracted together. A bigger TGA balance, in his telling, drains dollars from circulation the way any government account parked at the central bank does. In September he treated a Federal Reserve balance-sheet expansion as the premise on which liquidity would return to crypto markets. The same framework ran through his September commentary, where balance-sheet growth, not sentiment, was the gate. Each element he raised, from the TGA to bank reserves, describes a door through which dollar liquidity can enter. He also pointed to euro and yen exchange rates and to French fiscal risk as forces that could raise easing pressure, part of the argument that liquidity expansion remains possible even from current conditions. His position on regulation was blunt in the same period: in a September 18 post on X he called the CLARITY Act “nonsense regulation”, arguing that money flows and liquidity matter more to Bitcoin's direction than regulatory clarity does. His own positioning matched the caution. The message he left in September was that positioning follows liquidity, and his book reflected it. On-chain tracking showed the crypto whale sold roughly 6,400 ETH, 14 million ENA and 323,000 UNI, alongside other tokens, as he closed his directional portfolio and realized gains across the altcoin side of the Bitcoin market. The sales covered his directional book rather than a small trim, and he framed the exits as profit-taking. He said at the time that he would stand aside for the time being rather than HODL through the drawdown, and gave no date for returning.

COINOTAG's reading: the load-bearing record is the index Hayes publishes himself. Even on his own measure, dollar liquidity is up 4.49% this year and sits within about 190,000 points of its yearly high, yet he declines to call a turn. That makes the call about the source of the next increment, not its level: the Fed or the banks must expand, and no schedule exists for either. His framework leans on balance-sheet mechanics, not on the halving cycle or supply-side schedules, and not on demand channels such as ETF flows. Others frame the downside differently: Michaël van de Poppe earlier named a $75,000 Bitcoin buy level if support fails. Until the bank condition moves, the practical reference stays our Bitcoin technical analysis, and the condition furthest from being met, commercial bank balance-sheet growth, remains undated.