Bitcoin (BTC) fell further on Wednesday ahead of a widely anticipated rate hike by the US Federal Reserve (FED) later in the day. So, what could happen in the next sessions? Here are the comments…
Fed interest rate expected for Bitcoin
BTC is trading at $21.110, down 8.2 percent in the last 24 hours. The world’s largest cryptocurrency has dropped 30 percent since last week after higher-than-expected US inflation data. The focus now turns to how the coin might respond to a Fed rate hike later in the day. BTC fell when the Fed raised rates in early May. Probably this time he faced a similar surrender.
Technical indicators show that BTC is ready to drop as low as $13,000 if this downtrend continues, according to experts. Broader uncertainty over the cryptocurrency market is also causing weakness in the coin. BTC fell over 8 percent after the Fed raised rates on May 4. Then, with the intensification of a cryptocurrency sale; The following week, it fell another 28 percent to $28,000.
Last time, the Fed increased rates by 50 basis points (bps). Now, given the warming inflation figures, traders are saying; they are positioned for a 75 basis point increase by the central bank. This will be the Fed’s sharpest rate hike in recent history.
How low can BTC drop?
The move will loosen two years of loose monetary policy that drove crypto markets to record highs. It also indicates that the central bank is concerned about a possible recession following rising inflation. A recession creates even more problems for retail, risk-weighted assets like BTC and crypto. As we reported on Kriptokoin.com, a famous trader Peter Brandt recently predicted that BTC could drop as low as $13,000 as it plays a double top model. A negative signal from the Fed would likely add more confidence to this forecast.
BTC falling below $20,000 will trigger a series of liquidations, which will see more coins thrown into the open market. In BTC, about $1 billion worth of positions have been liquidated in the last two days. The downturn in the cryptocurrency market continues without showing any signs of slowing down. Therefore, Bitcoin fell below $21,000. He left about $1.24 billion in total liquidations in the last 24 hours. According to many, this trend is likely to continue.
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