Bitcoin Crash Incoming? Analyst Warns of ‘Blood’ Ahead of Fed Meeting

Vinod Dsouza
Bitcoin BTC Meltdown Crash Bear

The Federal Reserve is set to meet on Feb. 1, 2023, and is most likely to announce an interest rate hike of 25 BPS. quoted a pseudonymous market strategist named “The Carter”, who warns that the cryptocurrency markets could experience a bloodbath for the first time in 2023 ahead of the Fed meeting.

“This is the craziest market set-up right here, right now. There will be blood on Feb. 1,” said the cryptocurrency analyst.

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Carter noted that the Fed Chief Jerome Powell has repeatedly referred to “broader tightening” to tame inflation in the U.S. Powell suggested that the Federal Reserve could tighten interest rates in three stages, and they include: rapid hikes to reach a neutral rate, measured hikes to remain restrictive, and stay on the terminal rate.

The analyst suggested that Powell remains in the first stage and could aggressively tighten rates until inflation falls below 4%. Only then would the Fed unveil the rest of the two stages, predicted Carter.

“There will be blood on February 1. Powell will re-tighten financial conditions by forcefully addressing rate cuts head-on. At the November FOMC he referred to the ‘broader tightening project’ as having three stages: 1) Rapid hikes to get to neutral, 2) Measured hikes to get to ‘sufficiently restrictive. 3) staying at the terminal rate for some time,” he said.

Also Read: Here’s How Bitcoin Could Fare in February 2023

He added, “Powell is laser-focused on not ‘prematurely easing’ policy to avoid the Burns Fed ‘stop and go’ error. The mere discussion of rate cuts is anathema to this ‘broader tightening project”.

Bitcoin Crash Incoming?

Bitcoin BTC Crash Fall Collpase

Bitcoin had a phenomenal start in 2023, as it jumped from $16,000 to $23,000 in January. BTC is being rejected at $23,400 levels and needs to break through to climb above the $25,000 mark. The Fed’s interest rate hikes could dampen Bitcoin’s prospects and derail its stellar January performance.

February 2023 seems to be challenging for BTC as the month begins with the Fed meeting. The cryptocurrency markets would remain on the razor’s edge this week as Bitcoin could experience volatility. It is advised to wait and watch how the markets react to the Fed meeting before taking an entry position into BTC this week.

Also Read: Top 3 Cryptocurrency to Watch in February 2023

At press time, Bitcoin was trading at $22,924 and is down 0.8% in the 24 hours day trade. BTC is also down 66.8% from its all time high of $69,044, which it reached in November 2021.