Bitcoin To Reach $15K, Expert Explains How To Handle The Crash
Bitcoin and Ethereum prices continue to be in a rut. Bitcoin prices have dropped over 6% in the last week. It is concurrently trading at a little over $20K. Ethereum prices have also dropped close to 3% in the last 7 days. It is currently trading at a little below $1.6K.
Cryptocurrency prices have struggled because of the hawkish sentiment of the Federal Reserve. Fed chair Jerome Powell warned of pain for households and businesses as a cost of fighting inflation. A strong jobs report can cause BTC to plummet to $15K.
In light of the economic uncertainty, Benjamin Cowen, a major crypto influencer, is warning the investors against fighting the Fed. He believes that the Fed will not pivot to printing money anytime soon to protect the risk asset markets.
Federal Reserve Impact On Bitcoin
The Federal Reserve plays a huge role in the price movement of the crypto market. Since the start of 2020, the crypto market has been strongly correlated with the traditional stock market. In particular, it behaves like tech stocks and strongly correlates with the tech-oriented NASDAQ. Therefore, macroeconomic factors play a huge role in crypto prices.
Bitcoin rallied after back-to-back data, first, the Consumer Price Index and then the Personal Consumption Expenditure, highlighted cooling inflation. However, the Federal Reserve dampened any enthusiasm. Traditionally dovish Fed officials, like Minneapolis Fed’s Neel Kashkari took an aggressive stance against inflation.
The Fed seems set for another 75 bps hike at the next FOMC meeting. Some experts have even laid down the expectations for a 100 bps interest rate hike.
Don’t Fight The Fed
Cowen believes that the Fed wants risk assets like cryptocurrencies to crash to combat inflation. Moreover, he believes that the crypto consumers should not want the Fed to pivot early. It may bring relief in the short term but will be dangerous in the long run.
The only hope for consumers is to hope for continued data supporting the notion of cooling inflation.
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