BitMEX co-founder Arthur Hayes has predicted that the cryptocurrency market will peak in March. After this, he expects a major correction to happen. 

Hayes noted that Bitcoin bottomed in 2022 around the same time the Fed’s Reverse Repo Facility (RRP) reached its zenith. A significant liquidity injection helped to propel tech stocks and Bitcoin. 

He has predicted that the Fed might end up losing its ability to manage rising bond yields in an efficient manner if the Treasury General Account (TGA) runs out of money. 

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According to the analyst, money market funds are on track to withdraw $237 billion in liquidity from the Reverse Repo Program (RRP) in the first quarter in order to purchase short-term government debt. Such a liquidity injection would be a bullish development for Bitcoin in the short term. 

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The Treasury will have to spend down the TGA if Congress fails to raise the debt ceiling. 

These two developments will likely positively affect Bitcoin's price action in the first quarter of the new year. 

However, the Treasury will have to replenish the TGA once Congress raises the debt ceiling. "At that point, the Treasury will be free to borrow on a net basis again and must refill the TGA. This will be dollar liquidity negative," he said. 

Tax deadlines will be another bearish headwind for Bitcoin in April. 

Hence, Hayes believes that the cryptocurrency market will experience a severe correction due to the aforementioned factors negatively affecting liquidity. 

The former BitMEX CEO has also opined that other factors should be taken into account. These include the monetary policies of China and Japan. 

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