Bitcoin’s Fate Hangs In The Balance Amid Fed Rate Hikes: Are The Lows Yet To Be Reached?
The Federal Reserve increased its benchmark interest rate by a quarter of a percentage point, but there were few signs that this cycle of rate increases was coming to an end. The Federal Open Market Committee raised the federal funds rate by 0.25 percentage points in line with market forecasts. That brings it to the highest goal range since October 2007 of 4.5%–4.75%.
This is said to have detrimental effects on the crypto industry and has garnered a lot of criticism. Let’s explore.
Bloomberg analyst shares insight
Mike McGlone, Senior Macro Strategist at Bloomberg Intelligence, has added another perspective on the present trend. The market strategist claims that there is no guarantee that the anticipated Bitcoin bottom has occurred and that the currency must retake the $25,000 resistance level in order to return to the Risk-Asset Revival.
The expert emphasized the delicate correlation between Bitcoin and the crypto market and the stock market, and he predicted that if the stock market lows have not yet been reached, more crypto short positions will be opened around the beginning of March.
The futures market dynamics are even more turbulent, with the market seeing up to $245 million in total liquidations as a result of the ongoing market rout. According to McGlone, the dynamics primarily depend on how the Fed’s monetary policy is going to be implemented.
Others share McGlone’s viewpoint
Elon Musk previously expressed worry about the Federal Reserve raising interest rates by claiming it could destroy the stock market. In a recent Tweet, Musk claimed that the Fed is raising the monthly payments for anything purchased with debt as a result of rising interest rates.
Following the COVID-19 outbreak in early 2020, interest rates were lowered to 0-0.25%. In March 2022, the central bank started raising rates.