Bitcoin and cryptocurrency markets have taken a sharp nosedive, mirroring recent volatility in global stock markets. This downturn was spurred, in part, by Tesla billionaire Elon Musk’s unexpected warning about Bitcoin’s price trajectory.

Earlier this week, Bitcoin soared to an all-time high of $100,000 per coin, a milestone celebrated by investors and enthusiasts alike. However, the euphoria was short-lived as the price plummeted to $92,000. This drastic drop came despite a major Wall Street investment bank making a bold bet on a transformative Bitcoin innovation.

Now, the crypto world is on edge, bracing for what some are calling an “imminent” announcement from Musk’s social platform X. Adding fuel to the fire, legendary crypto investor Arthur Hayes has predicted a significant market crash by late March. Hayes, cofounder of crypto derivatives pioneer BitMEX and founder of the Maelstrom investment fund, issued his forecast in a recent blog post.

“Right on schedule, just like almost every other year, it will be time to sell in the late stages of the first quarter,” Hayes wrote. “We need to wait for positive fiat liquidity conditions to re-emerge in the third quarter.”

Hayes’ analysis points to the cyclical nature of Bitcoin’s price movements, which tend to rally when dollar liquidity increases and retreat when it contracts. He previously gained attention for accurately predicting Bitcoin’s collapse around the inauguration of former U.S. President Donald Trump.

“I still believe that is a potential negative factor that could weigh upon the market in the short term,” Hayes added, “but against that, I must balance the dollar liquidity impulse. Bitcoin, for now, jukes and jives as the pace of dollar emissions changes.”

Hayes’ warning comes as the U.S. Treasury’s general account nears depletion toward the end of the first quarter, a situation worsened by the nation’s debt ceiling negotiations and the looming April 15 tax deadline.

The broader crypto market is also grappling with reevaluations of Federal Reserve policies. Robust U.S. economic data has cast doubt on expectations of interest rate cuts in 2025, leading traders to adopt a more cautious stance.

“The Trump-dump that some had anticipated after his inauguration has seemingly been fast-tracked as the cryptocurrency market dives deep into the red zone,” noted Petr Kozyakov, CEO of crypto payment platform Mercuryo, in an emailed statement.

Interestingly, former President Trump has recently declared plans to establish a U.S. Bitcoin strategic reserve. “We’re gonna do something great with crypto because we don’t want China or anybody else to lead,” Trump told CNBC in December. “Others are embracing it, and we want to be ahead.”

However, enthusiasm over this announcement has faded. Bitcoin is once again showing its volatility, oscillating between being a high-risk asset and a potential safe haven.

As the Federal Reserve signals it may keep interest rates elevated longer than expected, market sentiment remains fragile. Investors are left wondering: Is now the time to sell and brace for a downturn, or is this just another chapter in Bitcoin’s ever-volatile journey?

While the future of Bitcoin remains uncertain, one thing is clear: the crypto market continues to test the resolve of its participants, offering both opportunities and challenges in equal measure.