Bitcoin Price Fluctuations: BTC Crosses $22K, How High Can It Go
Due to shaky macroeconomic conditions, the price of Bitcoin is seeing major fluctuations. BTC crossed $22.1 K before falling slightly below $22K again. The largest cryptocurrency has increased close to 10% in the last 7 days.
Major Bitcoin influencer and trader, James of Invest Answers, believes that BTC crossed the critical resistance area of $21,750 and will target the $24K price range. However, experts also warn against quick pump-and-dump as macroeconomic conditions are currently uncertain.
What Is Influencing The Price Of Bitcoin
The macroeconomic conditions are causing the fluctuation in the crypto market. After nearly crossing the $22.2K mark, the price of Bitcoin fell back to below $21.8K. The Consumer Price Index data for August will be released tomorrow. This data is expected to significantly influence the Fed’s decision about the next interest rate hike.
The Fed is expected to continue its hawkish stance of quantitative tightening to combat inflation. Fed chair Jerome Powell believes that the Fed will want to quickly bring inflation under 2%. The central bank does not want the soaring inflation to become the norm in the minds of the consumers. St. Louis Fed president James Bullard reveals that he backs another 75 bps interest rate hike.
Minneapolis Fed president Neel Kashkari and Cleveland Fed president Loretta Mester have both advocated for an aggressive stance against inflation. The CME Fed Watch Tool is now showing a 90% probability of a 75 bps hike. It is unlikely that the Fed will pivot from its hawkish stance after September. According to Mester, the Fed will have to raise the interest target rate above 400 bps to combat inflation. The current target rate is 225-250 bps.
Other Key Events To Watch
The CPI date will be released on the 13th of September. However, it is not the only key event this week. The CPI for UK and Euro Area will also be released. Moreover, the PPI, another key inflation index, will also be released for the US.
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