- Most of the investment experts are warning that the price of Bitcoin could stoop down to $30k.
- Bitcoin can lower its price up to 30000 dollars if there is any news of the US inflation, and it is higher than the forecasted data.
- There is an expectation of a 7.1 % rise for the consumer price index throughout December, and after that, there will be a 0.4 % monthly increase.
Most of the investment experts are warning that the price of Bitcoin could stoop down to $30k. This warning has been given against the intention of the US federal reserve, which wants to tighten the asset purchasing program. This confinement is mostly because of the spike in the rates which happened in 2022 itself.
Bitcoin can lower its price up to 30000 dollars if there is any news of the US inflation, and it is higher than the forecasted data. This morning has come from Alex Kruger, the founder of an asset management firm named Aike Capital.
There is an expectation of a 7.1 % rise for the consumer price index throughout December, and after that, there will be a 0.4 % monthly increase. This is the cause behind the US federal reserve officials’ faster normalisation of their financial policy. Another cause is the normalisation of the labour market and income rise. Moreover, unemployment claims are falling as declared in the data of January 7.
Kruger tweeted that cryptocurrency assets are at the front end of the risk curve, and there have been a lot of benefits from the LAX monetary policy. But it can be surely said that there will be an unexpected amount of tight policy shifts so that the money can go to safer asset classes. Bitcoin is currently a macro asset that can be used for liquidity conditions. However, since it is becoming illiquid, most investors are hell-bent on selling their Bitcoin.
Will March 2022 see a hike in an interest rate and crash Bitcoin?
Fed what about 80 billion dollars price of government bond and 40 billion mortgages backed securities. It has happened every month since March 2020, and right now, the transaction is huge. On the other hand, the US Central Bank has been able to keep its benchmark interest rate at almost zero. Therefore it is making the businesses and individual lending process cheaper.
But there is also collateral damage which is loose monetary policy due to higher inflation, and it went up to 6.8 % in November 2021. According to the data, it is the highest in almost 40 years.
Fed once claimed that the consumer prices are quite transitively, but now it has switched its opinion. It says that 2022 will not expect any interest rate hike, so there is optimum balance sheet normalisation.
According to Leo Grohowski, most market participants expect higher rates and less accommodation in monetary policy. But if we talk about fed funds, there is a 90% chance that the Hike will happen in March compared to New year’s eve when the rate was only 63 %.
Mini Bear Marketplace?
The senior commodity strategist of Bloomberg intelligence said that 40000 dollars are a crucial support level point in the Bitcoin market. Also, he is anticipating that the cryptocurrency will not be in the bearish phase for long because the world is gradually becoming digital, and BTC will be treated as collateral.
This statement came from that Bitcoin dropped from $69000 by 40% after November 8. Eric Ervin says that the drop has eliminated the recent investors, and the market is only left with long-term holders. It could be the initiation of a mini bear market, and such rectifications are normal for all the encrypted masters out there.
Kruger notes that Bitcoin has gone down from the record high and is technically oversold. As a result, markets can now expect the Bitcoin price to be on the trending shelf.