Can Bitcoin (BTC) Crash To $13K After The Fed Rate Hike? - page 2.

jaberwock

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Quote from: buwaytress on June 25, 2022, 04:55:32 AM

@adaseb yeah I don't think it was the hike alone, but neither was it Luna (in fact I think that scenario is less likely as a main factor, was a convenient scapegoat for sure). I mean, the timing of the hike, the immediate stock market reaction leading up to it (pricing it in) and then the rally as expectations were met, that correlated just so closely with BTC price.

It's just a convergence of macro factors, and like it or not, investors see Bitcoin (right now) as the same risk-on assets as stocks.

That is definitely a not, how could we like it lol. I mean bitcoin was created to be a decentralized currency that is not attached to any government at all, and then the stocks of the American companies somehow manage to be the similar situation as that. How could we end up with something that is like that? How could we feel fine with something like that at all?

I feel like there is a good case to be made that this is opposite of what bitcoin should have done and that is why I am feeling about the current situation as the worst it could get. In the long run we are not going to really face anything that is terrible for the long shot, but it will definitely not be good feeling neither.

gikere

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So, from what you guys said, Fed hike did affect crypto and BTC but not enough to cause it to crash to $17k alone. It means the next Fed rate hike will not be as devastating as the one before. Still, the market has some weak links that I fear would add oil to this: NFTs, TRX/USDD, Sol,...

dragonvslinux

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Quote from: adaseb on June 24, 2022, 10:47:56 PM

This crash to $17K had nothing to do with the fed rate hike. We knew last year they would be hiking and why we topped at $69K.

The reason why we crashed was because of Luna failing which led to Celcius failing which led to 3AC failing and causing massive liquidations everywhere. This had nothing to do with the fed.

If the numbers are stable and going down then we might bottom but if we still see rising inflation then stocks will keep going down along with crypto.

Well said, though I do see the domino affect here. People anticipating a rate hike creates a small correction, the small correction leads to liquidations, liquidations leads to insolvencies & collapses, etc. The irony being that a lot of selling (if not most) since $40K down to $20K was caused by Luna (LFG), Celsius and 3AC, rather than long-term holders. At least what triggered the aggressive sell-off.

Although price dropped 75% from ATH, this does seem similar to May 2021 when price dropped in half due to how over-leveraged the market was to the upside (like CEL/3AC). Despite market conditions being more favourable back then, price did double in value within the space of a few months after just a couple of months of consolidation. The question is whether BTC prices can hold $20K for a couple of months I think.

Poker Player

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Quote from: mk4 on June 24, 2022, 12:10:40 PM

Quote from: Iadegbola34 on June 23, 2022, 03:54:24 PM

Bitcoin was created to be deflationary, so any increase in the inflation rate of fiat should naturally make people adopt Bitcoin more. If it's not happening according to the design of bitcoin we might as well believe the Feds news didn't have an effect on bitcoin whatsoever.

This is a very common misconception.

Bitcoin is going to suck today as an inflation hedge due to it being priced in as a volatile "risk" asset. Once it matures more in the future, then sure probably an inflation hedge in the future. But today? (or at least this year) Hell no. And not because it performed badly in an inflation-filled market today, doesn't mean it will perform the same in the far future.

I see that you are only partly right. To think that a rate hike should lead people to automatically buy Bitcoin as Iadegbola34 says is a mistake, I agree, but Bitcoin has proven to be the best inflation hedge since it was created. Even with the recent downturn, Bitcoin has hedged better against inflation than gold or the stock market, for example, as those have also gone down. Another thing is that it is volatile, since the definition of inflation hedge makes no mention of volatility:

What Is an Inflation Hedge?

An inflation hedge is an investment that is considered to protect the decreased purchasing power of a currency that results from the loss of its value due to rising prices either macro-economically or due to inflation. It typically involves investing in an asset that is expected to maintain or increase its value over a specified period of time.

The point is that in the medium and long term, Bitcoin has so far proven to be the best inflation hedge since its inception.

buwaytress

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@adaseb yeah I don't think it was the hike alone, but neither was it Luna (in fact I think that scenario is less likely as a main factor, was a convenient scapegoat for sure). I mean, the timing of the hike, the immediate stock market reaction leading up to it (pricing it in) and then the rally as expectations were met, that correlated just so closely with BTC price.

It's just a convergence of macro factors, and like it or not, investors see Bitcoin (right now) as the same risk-on assets as stocks.

bbc.reporter

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@adaseb. It was everthing, I reckon. The hiking of interest rates, Luna's failure, Celsius insolvency and the liquidation of 3 Arrows Capital. It is also being speculated that Su Zhu and Kyle Davies have also borrowed bitcoins from different cryptolenders by using fake documents and through lying. Everything was mentioned in this podcast.

https://open.spotify.com/episode/1zYvjE0IjXFnwh7ASfOMpV?si=sfK-CaPkSluGPYU2OidMPw&nd=1

adaseb

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This crash to $17K had nothing to do with the fed rate hike. We knew last year they would be hiking and why we topped at $69K.

The reason why we crashed was because of Luna failing which led to Celcius failing which led to 3AC failing and causing massive liquidations everywhere. This had nothing to do with the fed.

If the numbers are stable and going down then we might bottom but if we still see rising inflation then stocks will keep going down along with crypto.

OgNasty

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Bitcoin's price can do anything. That includes a crash to $13K after the fed rate hike, or a crash to $0 tomorrow morning for some random black swan event. It could also go to $500,000 in the next hour. The trick is to be prepared for any of these events and be able to handle if things go the complete opposite way of your expectations. As long as you aren't playing with leverage and you're a long term thinker, it shouldn't matter if you buy BTC here and it does go to $13K. Just because someone offers you a price for something you have, doesn't mean you have to take it. Wait for better offers to come along and enjoy holding the asset you wanted.

edgycorner

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Hurrah for Karamazov!

There is no doubt that BTC is susceptible to interest rate hikes by the Federal Reserve, but I think that the article is overestimating its dependency. It presents a very bleak picture.
That article does not provide enough information about why the author believes that Bitcoin will react negatively to a Federal Reserve interest rate hike either. Correlation isn't causation .-.

mk4

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Quote from: Iadegbola34 on June 23, 2022, 03:54:24 PM

Bitcoin was created to be deflationary, so any increase in the inflation rate of fiat should naturally make people adopt Bitcoin more. If it's not happening according to the design of bitcoin we might as well believe the Feds news didn't have an effect on bitcoin whatsoever.

This is a very common misconception.

Bitcoin is going to suck today as an inflation hedge due to it being priced in as a volatile "risk" asset. Once it matures more in the future, then sure probably an inflation hedge in the future. But today? (or at least this year) Hell no. And not because it performed badly in an inflation-filled market today, doesn't mean it will perform the same in the far future.

hugeblack

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I think that the price forecast for the next six months is linked to internal and external factors, and external factors affect the interest rate, and expectations of economic stagnation to a large extent, but we may not see it have an impact after next August.

As for the interior, it is difficult to predict because the market is open to all options, but it is definitely between 10k and 50k, in other words, it is difficult to break the previous peaks or the sharp decline in the price.

In short, the next two months may settle the debate about whether we will go to the 50k or will we remain below 30k.

dragonvslinux

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Despite all the bearish sentiment around risk-based markets at the moment, I still don't see a drop to $12K to $14K in the near future. Already today we see the S&P again rebounding from oversold conditions along with Bitcoin finding buyers below $20K all the while Gold is failing to hold it's 50 Week MA, indicating that it may well turn bearish if it falls much lower.

I think if BTC is to drop much lower it would be later in the year, towards the end of it, only after a rebound to $30K, even $40K to $50K. It might also only happen if this bearish sentiment continues, or we see a black swan capitulation even like in March 2020. Otherwise, Bitcoin may just remain bearish until the end of the year while otherwise trading sideways between $20K and $30K.

buwaytress

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The 0.75 hike was painful, but fully expected. Markets priced that in well ahead of the official announcement, which does help explain the recovery since. A lower rate would have bumped us all up, a higher one probably would jave lost us another 10%.

Only problem now is what the next hike will be. Still can't quite tell what the market is expecting, and what it will then price in but half a point seems the consensus for July.

Once more... Meet expectations and we will be okay for now. But yeah anything else could resurface in the weeks until then. So fragile right now...

btc_angela

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Quote from: goaldigger on June 23, 2022, 04:43:51 PM

Quote from: Iadegbola34 on June 23, 2022, 03:54:24 PM

Bitcoin was created to be deflationary, so any increase in the inflation rate of fiat should naturally make people adopt Bitcoin more. If it's not happening according to the design of bitcoin we might as well believe the Feds news didn't have an effect on bitcoin whatsoever.

This is the belief before where Bitcoin can be the safe heaven during the economic crisis but it looks like its not because the price trend follows the trend of the stock market and that issues with the inflation rate is something that needs to be address as well. There’s a possibility for a more cheaper price with Bitcoin, better to be ready with your cash and buy if you see this opportunity. The market is very unstable right now, let’s all hope for the best and see if Bitcoin can recover this year.

Yeah, everyone reacts to FED rate hike news, cryptos, stocks, oils, everyone is shaken up. But the thing with crypto is that we can bounce back even if it crash to $13k.

And $13k is a big possibility, I mean we hit $17k already and then a recovery to $20k-$21k. The market though is very sensitive at the moment, any negative news will put selling pressure so it's better to brace ourselves the possibility that we haven't seen the bottom yet.

goaldigger

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Quote from: Iadegbola34 on June 23, 2022, 03:54:24 PM

Bitcoin was created to be deflationary, so any increase in the inflation rate of fiat should naturally make people adopt Bitcoin more. If it's not happening according to the design of bitcoin we might as well believe the Feds news didn't have an effect on bitcoin whatsoever.

This is the belief before where Bitcoin can be the safe heaven during the economic crisis but it looks like its not because the price trend follows the trend of the stock market and that issues with the inflation rate is something that needs to be address as well. There’s a possibility for a more cheaper price with Bitcoin, better to be ready with your cash and buy if you see this opportunity. The market is very unstable right now, let’s all hope for the best and see if Bitcoin can recover this year.

Iadegbola34

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Bitcoin was created to be deflationary, so any increase in the inflation rate of fiat should naturally make people adopt Bitcoin more. If it's not happening according to the design of bitcoin we might as well believe the Feds news didn't have an effect on bitcoin whatsoever.

NotATether

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Well, it makes me glad I paid all my crypto bills in advance last March.

I have a few disposable cards with a few dozen dollars in them that can be used to replenish my credits at will, but it's quite hard to do so since the prepaid cards sometimes (erroneously) fail fraud checks and I don't want to risk any of my important services during the bear market.

I also have about $35 in USDT-TRC20 that's for some reason stuck in Guarda Wallet. I'm not sure what's wrong with that, seems to be a UI problem as I have plenty of dust TRX for the purpose of selling that off.

So I won't have to worry abut my bills until at least late July or so

franch

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Bitcoin (BTC) slumped further on Wednesday ahead of a widely anticipated interest rate hike by the Federal Reserve later in the day.
BTC is trading at $21,200- down 4% in the past 24 hours. The world’s largest cryptocurrency has plummeted 30% since last week after a higher-than-expected U.S. inflation reading.
Focus now turns to how the token could react to a Fed rate hike later in the day. BTC had tumbled when the Fed raised rates in early-May, and likely faces a similar capitulation this time.
Technical indicators show BTC is primed to sink as low as $13,000 if this downtrend continues. Broader uncertainty over the crypto industry is also causing weakness in the token.
BTC capitulated over 8% after the Fed raised rates on May 4. It then went on to slump another 28% to as low as $28,000 in the next week, as a crypto rout intensified.
Last time, the Fed raised rates by 50 basis points (bps). Now, given the heated inflation figures, traders are positioning for a 75 bps hike by the central bank, according to data from CME Group. It would be the Fed’s sharpest hike in recent history.

Source: https://coingape.com/can-bitcoin-btc-crash-to-13k-after-the-fed-rate-hike/

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