Bitcoin Braces for Deeper Bear Market as Fed Eyeing Another Big Rate Hike
New York City: As a result of persistent inflation, the Federal Reserve of the United States is contemplating raising interest rates by a greater amount than was previously anticipated the following month. According to the New York Times, “Federal Reserve officials have coalesced around a plan to raise interest rates by three-quarters of a point next month.”
The currently difficult market circumstances occur at a time when Fed officials are still unable to provide a clear answer on when they may be able to stop adjusting interest rates. The New York Times reported that market observers are betting that this trend will continue until at least December, or perhaps until a meeting next, based on economic projections and statements from the central bank. This betting is based on the fact that this trend is expected to continue until at least December.
Figures from the Consumer Price Index (CPI) reveal that inflation rates are on the increase, increasing by 6.6% over the course of the year through September. This is a 40-year high for inflation rates. Inflation shows no indications of slowing down. At light of the fact that the Fed is expected to have another meeting in the beginning of November, market watchers anticipate yet another rate increase. Even the data suggests that Federal Reserve policymakers could agree with a decision to hike interest rates.
The Federal Reserve increased interest rates by 75 basis points in September, making it the sixth increase in rates this year. The Federal Reserve had signaled at that time that it was unlikely to be the last interest rate increase of the year. On October 10, Vice Chair Lael Brainard addressed the problem of increasing inflation and said that the Federal Reserve would continue to implement restrictive monetary policies.
The present surge in inflation may be attributed to a number of different causes, including as the pandemic demand issues, the conflict in Ukraine, and the supply chain’s struggle to keep pace with demand. In spite of many hikes in the target interest rate, the central bank has not been successful in bringing inflation under control.
Bitcoin’s price fell below $19,000 earlier this month, just after the Federal Reserve announced another significant hike in interest rates – the institution’s sixth straight increase in rates so far this year. As investors respond to an uncertain economic climate, the effects of each fresh rate rise by the Federal Reserve continue to play out throughout the cryptocurrency and stock markets.
Following the Federal Reserve’s meetings in March, May, and June, the price of bitcoin fell by at least 10 percent or more, as seen by historical price charts. In light of these findings, cryptocurrency investors may be in for another wild ride throughout the next month.
Market expert Aaron Arnold predicted a further decline in the price of Bitcoin in an interview that was broadcast on Wednesday. Arnold said that the current BTC price is already replicating the bear market that occurred in 2018–2019. Arnold believes that Bitcoin is now consolidating around a price range of about $19,000 to $20,000, similar to how it was consolidating at $6,000 in 2018.
According to the market participant, while the price of Bitcoin had stabilized around $6,000 per coin in 2018, it subsequently plunged by fifty percent. Arnold said that the danger is occurring again and again in the present market. As a consequence of this, he predicted that the price of bitcoin might drop to support at $11,000 to $14,000 or go as low as $6,000.
One of the primary reasons for this is as a result of the quantity of negative signs now present in the market, which includes the production cutbacks implemented by OPEC, the problem with sovereign debt, excessive inflation, and the depreciation of the dollar.