The world’s largest cryptocurrency has slumped in a broader equity market selloff, and Bitcoin is now subject to several macro factors, including the much-anticipated US Federal Reserve (FED) meeting Wednesday to be followed by Fed Chairman Jerome Powell’s press conference. sensitive. So what is expected for the biggest cryptocurrency Bitcoin and SHIB? Here are the details…
What has affected the Bitcoin price recently?
According to Ben McMillan, founder and CIO of IDX Digital Assets, the COVID pandemic has changed the structure of Bitcoin investors forever, so the cryptocurrency’s correlation with tech stocks is at an all-time high and will not return. McMillan used the following statements:
I would like to refer to Paul Tudor Jones’ letter of May 2020 in which he spoke of unprecedented levels of global monetary stimulus and the fact that fiat money can be printed. That’s why gold is a good store of value. But Jones also talks about Bitcoin. BTC has really entered the radar of many institutional investors.
But he thinks this adoption is behind BTC’s 18% drop in the last month. According to the expert, “as institutional adoption continued to increase, so did Bitcoin’s correlation to the stock market.” McMillan. “The days of negative or zero correlation with stocks are gone,” he says. He also states that the involvement of institutions means constant rebalancing, thus making BTC susceptible to equities and larger macro factors.
McMillan: The FED hit Bitcoin the hardest
As we have reported as Kriptokoin.com, with the forecasts of extreme rate increases in May, June and even July, the expectations are from a slightly hawkish Fed. While shifting to a very aggressive Fed, Bitcoin has fallen faster than stocks. McMillan said, “Earlier this year, the Fed hit Bitcoin the hardest in relation to interest rate hike programs. Bitcoin is traded like a macro asset and is greatly affected by inflation, Fed policy, the war in Ukraine and other external market factors,” he said, and explained the Fed’s reaction to the contraction program as follows:
Market, contraction will really look for more clues about his program. And when will we reach peak inflation? It’s about whether the Fed will go into a soft landing. To what extent are we looking? A recession in 2023? These are key things that could potentially come as a surprise, not just at the May meeting, but for the rest of this year as well.
Will Bitcoin be able to test its record levels?
McMillan said, “If the inflation numbers start to look better than expected, or if the Fed pulls back a bit from its conventional schedule, there is a scenario where Bitcoin could participate disproportionately to stocks. Bitcoin is trading like a spiral spring, where any upside surprise can draw real bids from other risk assets or investors on the edge. “I wouldn’t be surprised to see Bitcoin retest all-time highs in the back half of this year.”
The expert cites that there must be a lot of selling for BTC to drop below $30,000. On the upside, there is a strong sell-off between $44,000 and $47,000 on the uptrend, according to McMillan, and trading activities above these levels are dominated by profit seekers. McMillan used the following statements for BTC:
You want to see Bitcoin clearly break above $48,000 or even the $50,000 region to start a new trend. The good news for Bitcoin is that it is much closer to the bottom than other risk assets. I wouldn’t be surprised if we start seeing institutions making some allocations from technology branches to invest in Bitcoin. When you look at Bitcoin’s potential for growth and disruption over the next decade, it’s far more attractive than many tech companies.
What’s next for SHIB?
After the FED’s statements, one of the cryptocurrencies that investors will look at the most will be SHIB. According to Filip L., a crypto analyst, Shiba Inu price will restart the uptrend after a bearish break below. However, it is stated that one should not expect to see a 35 percent increase towards $ 0.00002800, which is a vital level going forward. SHIB price is currently stuck at the intersection of two major trend lines. At the time of writing, SHIB is changing hands at $0.00002098, up 1.2 percent.
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