As hawkish remarks from the US Federal Reserve concerning inflation and the economic slowdown continue to weigh on riskier assets, the price of bitcoin today rose to trade above $20,000 after falling below the level in the previous sessions. At $20,333, the largest and most widely used cryptocurrency was trading slightly higher.
According to recent data, the market capitalization of all cryptocurrencies was again above the $1 trillion threshold today, having risen nearly 2% to $1.04 trillion the previous day. However, does this signal an opportunity to buy BTC, and by how much will the digital asset price drop? read on.
Popular cryptocurrency analyst Nicholas Merten predicts that after the most recent economic statement made by Federal Reserve Chair Jerome Powell, the price of digital assets will fall even more.
The fall in cryptocurrencies could deepen
On Friday, Jerome Powell announced that the Federal Reserve will adopt a tight monetary policy to boost interest rates and keep inflation under control. Several knowledgeable crypto experts commented on it after the announcement.
According to the DataDash server, which published claims on Youtube, Jerome Powell’s remarks to 515,000 subscribers and the following quotes from his speech will cause the cryptocurrency and other digital assets to suffer more:
In my opinion, the decline in the cryptocurrency will be worse not only after the short-term correction of August 15th, but also after the broader bear market correction and monetary tightening policy following Jerome Powell’s previous speech.
Furthermore, he said in his statements that the Federal Reserve’s strategy, even if it momentarily hurts the markets, fulfills its objectives by reducing inflation:
To be honest, he said most of us have a bad opinion about the Federal Reserve. But in terms of monetary policy, the Fed is acting exactly as it should. This overvalues the small balance deduction and drives up interest rates. In his opinion, even a move of 100 basis points is the best the Fed can do. It would be better to induce shock and astonishment, which would inevitably stall the economy for some time, reduce consumer demand in the short term and restore equilibrium.
Buying Opportunity for Bitcoin
But according to the analyst, now is a good time to buy Bitcoin (BTC) and Ethereum (ETH), the two most popular cryptocurrencies, as a result of the Fed’s actions and the current bear season:
Best of all, there is a chance that bitcoin, ethereum, and other cryptocurrencies will return to their bear market lows and suffer even worse declines. In this instance, it provides investors with some excellent entry routes.
