Billionaire investor and CEO of DoubleLine Capital, Jeffrey Gundlach, said that he will not buy from the bottom in Bitcoin and altcoins. The famous bond tycoon attributed his reluctance to invest in cryptocurrencies to the current bearish market conditions. Gundlach put the Fed at the center of this bearish market claim. According to him, the Fed will go further in tightening money. Therefore, risk assets are not a safe investment vehicle for now.
“FED will take more hawkish steps”
Investors continue to fear the effects of the Fed’s monetary tightening efforts. These fears have led to a $2 trillion market drop for cryptocurrencies from the start of 2022 to the present. At the time of writing, the total value of the cryptocurrency market has dropped below $1 billion. This value exceeded 3 billion dollars in November 2021. However, more falls are among the cards. August CPI data released on Tuesday show that inflation in the US is not improving.
Inflation is lower than the 8.5% annual increase measured in July. However, this data is above experts’ forecasts that inflation will fall to 8%. However, CPI data historically affect the decisions of the FED at FOMC meetings. The September meeting will take place on September 21. After yesterday’s data, Nomura economists updated their interest rate expectations as 75-100 basis points increase. The reason for this, they argued, was the need for a more aggressive way of raising interest rates to stem rising inflation.
“Gundlach expects a crash in Bitcoin and altcoins”
Gundlach said he expects a 20% drop in stock prices by mid-October. He also explained that he agreed with other bearish forecasts. The higher-than-expected CPI data also led to a decline in stocks. Bitcoin fell with them as it has a high correlation with stocks. On Tuesday, BTC fell about 11% to hit $19,855. This was the worst day for Bitcoin since June 18.
Previous profits were lost by the falling price. Bitcoin rallied to a one-month high of $22,800 before falling on Tuesday morning. Now Wall Street is preparing for more aggressive rate hikes from the Fed. Meanwhile, stocks and cryptocurrencies continue to fall following the market’s risk-averse mode. Bitcoin is trading at $20,330 at the time of writing.
“BTC has not bottomed yet”
As we reported on Kriptokoin.com, analyst Willy Woo says that the Bitcoin price has not yet bottomed out. According to him, BTC has not yet reached an accumulation level that matches the bottoms. Also, in terms of the maximum pain indicator, the market has yet to see the pain that emerged from the previous lows.
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