What's Hot

    CFTC plans to tighten regulation of the crypto industry in 2023

    04.02.2023

    Huge state-owned Chinese blockchain ChainMaker

    04.02.2023

    “Cryptotolet will start in Q2 2023”

    04.02.2023
    Facebook Twitter Instagram
    Saturday, February 4
    Facebook Twitter Instagram
    Crypto News
    • Home
    • Bitcoin
    • Ethereum
      • Altcoins
      • ICO
    • Analytics
    • Blockchain
    • Other
      • DeFi
      • Mining
      • Regulators
      • Security
    Crypto News
    Home»Bitcoin»Bitcoin falls to 3-month low, is it all about the Fed?
    f5d207dfbd51a1c9da15713ebbf92718beefb1ae
    Bitcoin

    Bitcoin falls to 3-month low, is it all about the Fed?

    AdministratorBy Administrator07.01.2022No Comments3 Mins Read
    Share
    Facebook Twitter LinkedIn Pinterest Email


    Reading time: ~ 2 m


    Bitcoin continues to lose ground as the December Fed meeting minutes released earlier this week highlighted the likelihood of a faster policy tightening.

    According to the data, the leading cryptocurrency fell to $ 41,012 during the Asian session on Friday, hitting its lowest level since September 29 and dropping to 12% over the week.

    The decline picked up on Wednesday after the Fed minutes showed that policymakers were discussing aggressive interest rate hikes along with faster balance sheet normalization, dubbed quantitative tightening (QT), as opposed to increasing balance sheet liquidity. The hawkish tone has taken its toll on stocks as tech stocks bleed for the second day in a row on Thursday.

    “Bitcoin has been traded as a risk / risk-free asset lately and appears to be tracking a decline in share prices,” said Jeff Dorman, CIO at Arca.

    Over the past couple of hours, about $ 200 million in long positions, which led to a decrease in the spot price. Leverage remains high and further falling below $ 40,000, especially since the yield on bonds will continue to grow due to the aggressive position of the Fed.

    The popular version says that the Fed’s plans to reduce its balance sheet and simultaneously raise rates could lead to a prolonged deflation of asset prices.

    Thursday US Treasury two-year yield that mimics short-term interest rate and inflation expectations better than yield 10-year bonds rose to a 22-month high of 0.87%. Short-term profitability more than doubled in the last quarter to 0,76%… Yields could rise further if US nonfarm employment data, due out at 13:30 UTC on Friday, shows the rate of job addition nearly doubled to 400,000 in December, as expected. This will confirm the Fed’s recent hawkish turn.

    According to Brent Donnelly, President of Spectra Markets, the macroeconomics of cryptocurrency has deteriorated over the past few months.

    “Remain bearish cryptocurrencies as the Fed’s QT plan accelerates. The macro story of crypto has gotten even worse since I started talking about the crypto bear case in November, ”Donnelly said in a policy brief.

    Concerns about a protracted bear market in equities and digital assets may be exaggerated as markets have historically remained resilient during tightening cycles.

    Indeed, Bitcoin remained largely tradable throughout most of the previous tightening cycle, which began in December 2015 and ended in December 2018. The cryptocurrency surged from about $ 350 to nearly $ 20K in the two years to December 2017, before entering a one-year bearish period.

    In addition, equity markets came under pressure in the last quarter of 2018 – after nearly two years of rate hikes.

    Bottom line – Fed rate hikes are not what causes big, lengthy market sell-offs … it’s AFTER very long Fed rate hike cycles where markets typically face sustained declines and recessions.

    Bloomberg’s Mike McGlone predicts Bitcoin and cryptocurrencies will benefit from the tightening cycle:

    “Expectations of a Federal Reserve rate hike in 2022 could support a win-win scenario for Bitcoin and the stock market. Stretched markets have become commonplace, but commodities and Bitcoin seem to be the leaders in early return. It is a question of the duration of the bull market and we see the benchmark cryptocurrency coming out ahead. “




    #Bitcoin #falls #3month #Fed

    3month Bitcoin Falls Fed
    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Avatar of Administrator
    Administrator

    Related Posts

    Kathy Wood called bitcoin the best financial insurance

    03.02.2023

    “Bitcoin is the only protection for money from inflation and currency devaluation”

    03.02.2023

    Sberbank to begin alpha testing of DeFi platform in March

    03.02.2023

    Bitcoin community considers 4 MB blocks to be stupid

    03.02.2023
    Add A Comment

    Leave A Reply Cancel Reply

    Recent Posts
    • CFTC plans to tighten regulation of the crypto industry in 2023
    • Huge state-owned Chinese blockchain ChainMaker
    • “Cryptotolet will start in Q2 2023”
    • Elon Musk vows to share ad revenue with content creators
    • News Hedera (HBAR)
    Recent Comments
    • 수원출장 on A professor from a US university restored the Tornado Cash code to GitHub
    • 123 on Taproot support added to LND Lightning client
    • houston junk car buyer on 16,000% increase in social media mentions in 2021 Shiba inu
    • Jim Carrey Memy on Bitwise Launches NFT Tracking Index Fund
    • hotshot bald cop on Kava developers launch testnet with EVM support
    Archives
    • February 2023
    • January 2023
    • December 2022
    • November 2022
    • October 2022
    • September 2022
    • August 2022
    • July 2022
    • June 2022
    • May 2022
    • April 2022
    • March 2022
    • February 2022
    • January 2022
    • December 2021
    • November 2021
    • October 2021
    • September 2021
    • August 2021
    • July 2021
    • June 2021
    • May 2021
    • April 2021
    • March 2021
    • February 2021
    • January 2021
    • December 2020
    Categories
    • Altcoins
    • Analytics
    • Bitcoin
    • Blockchain
    • Ethereum
    • ICO
    • Mining
    • Other
    • Regulators
    • Security
    Meta
    • Log in
    • Entries feed
    • Comments feed
    • WordPress.org
    Top Posts

    Subscribe to Updates

    Get the latest sports news from SportsSite about soccer, football and tennis.

    Advertisement
    Demo
    Facebook Twitter Instagram Telegram
    • Home
    • Bitcoin
    • Ethereum
    • ICO
    © 2023 Bt-Crow.com - CryptoNews

    Type above and press Enter to search. Press Esc to cancel.