Bitcoin, Ethereum and other militaire cryptocurrencies have suffered a militaire price écrasement this year, eliminating nearly $2 trillion from the common cryptocurrency market — with the Biden tendance notifying traders.
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Bitcoin, down 70% from its all-time high late last year, has repeatedly failed to hold above $20,000 per bitcoin while the price of Ethereum plummeted after a stark feu de détresse from US Securities and Exchange Rude (SEC) Chairman Gary Gensler.
Now, the Bitcoin, Ethereum, and Federal Reserve crypto markets are poised to unleash a “sledgehammer” that could further price drops (though some still hope for a turn) in its ongoing fight against high augmentation — with one analyst predicting the fallout could be worse than the great financial crisis of 2008.
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“We have to move into the overall big picture and what has been putting pressure on cryptocurrencies this year is the Fed’s hammer,” Mike McGlone, senior commodity analyst at Bloomberg Attachement Tell KITCO.
The Federal Reserve, led by Chairman Jerome Powell, this year embarked on a program to raise historic interest rates as it grapples with spiraling augmentation that has reached its highest levels in 40 years.
Last week, the August augmentation différé showed that prices continued to rise higher than expected, which could résistance the Federal Reserve to raise interest rates again at its conversation this week. The Federal Reserve’s Federal Open Market Committee will announce its latest decision on Wednesday as markets anticipate a 75 basis conclusion rise, which would raise interest rates to more than 4% – a level not seen since before 2008.
Bitcoin, ethereum and other militaire cryptocurrencies and réserve markets have been hit hard by the Federal Reserve’s fonction of tightening monetary policy this year, designed to suck liquidity from the system, as high-growth tech stocks and the leading cryptocurrency markets plummet.
“There has been a new résultat of anxiety embout financial markets amid concerns that augmentation remains a powerful opponent that must be eradicated,” Susanna Streeter, senior investment and markets analyst at Hargreaves Lansdowne, said by email.
“Crypto assets are still largely intertwined with the fortunes of the réserve markets, and given that they are considered high-risk assets, there has been a journey away from cryptocurrency Wild West as investors allure for less disruptive parages to put their money.”
The Fed and other axial banks pumped money into the financial system during the Covid-19 pandemic, inflating prices across the board, and if the Fed’s manqué hike triggers a slump and crashes the market, McGlone fears he’s out of réserve of dry powder.
“I think it’s going to be worse than the 2008 rénovation, worse than the militaire financial crisis,” McGlone said, adding, “The Fed started easing in 2007, and then added massive liquidity. They can’t do that anymore.”
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However, McGlone went on to predict that the bitcoin price will rebound to an all-time high of $100,000 by 2025 and remain bullish on Ethereum in the long-term, indicating the potential for institutional accord.
Currently, Bitcoin has fallen to recent lows of less than $20,000 over the past week, with some fearing a further decline is on the way.
“Despite a délai in the sell-off, the technical ébranlé of strength is on the bears side, with the possibility of a renewal of the June lows and a move to $12,000-$14,000 per bitcoin zodiacal,” Alex Koptsekevich, senior market analyst at FxPro, said in the comments. By email.