The stock and the crypto market have been struck by the bear as the weekend saw large corrections taking place. This turbulent period in the markets could continue as the Federal Reserve meets on Tuesday and Wednesday to discuss the next steps for U.S. monetary policy. Investors are keen for more guidance as FED plans to raise interest rates that could make the markets react strongly.
Markets must brace up
As the week moves along, the calendar seems all marked up for important events. As mentioned earlier, these events could have a direct or an indirect impact on both the crypto as well as the stock market.
Let’s have a look at them:
- Tech giants like Apple, Tesla, Microsoft, among others are expected to release their quarterly earnings this week.
- The overall U.S economy is also in the focus as the fourth-quarter GDP will be out on Thursday.
- On Friday, the personal consumption expenditures data, which also includes the FED’s inflation measure will be released.
Taking stock of the market
The inflation rate has hit 7% in the United States, the higher ever recorded since 1980. This is a major cause of concern for the central bank as well as the investors, making the Fed’s meeting a crucial event.
The markets are now on the razor’s edge after a steep dive in prices last week. Nasdaq slumped 7.6% last week in its worst performance since March 2020. Wall Street is having a painful start in 2022 and the financial debacle is also being mirrored on the cryptocurrency market.
The crypto market plummeted drastically on Friday and continued heading south throughout the Weekend. In the last 24-hours alone, close to $816 million worth of cryptos were liquidated dragging the market to its knees. Financial analysts, including Bitcoin tycoon Mike Novogratz, are predicting that the worst is yet to come for the crypto market.
More volatile trading for both the stock and the crypto market is expected this month. Investors are advised to remain cautious and not rush in by taking entry positions thinking the dip could be over. Refrain from blindly buying the dips and it is advised to wait and watch how the market reacts to the FED’s plans.
Crypto Markets to Dip 75-90%?
Just two weeks ago, former CEO of BitMEX, Arthur Hayes pained a gloomy picture of what could be coming ahead. He predicted that if Bitcoin falls below the $30,000 mark, it could drag altcoins down between 75 to 90%.
“If I believe that Bitcoin could trade below $30,000 and Ether below $2,000 in a three-to-six month time horizon, I will dump all of my shitcoins. That is because Bitcoin and Ether are the highest quality coins. And they will decline less than all their yet-to-be-proven competitors. Any specific applications that use the Bitcoin or Ether blockchain will also experience gravity at greater than 9.8m/s. These shitcoins could go down 75% to 90% in a true crypto risk-off environment,” he predicted in his Medium blog post.
At press time, Bitcoin was trading at $33,820.54 and is down -5.6% in the 24-hours day trade. BTC is down -33.7% since the last 30-trading days and is down -21.7% in the last 7-days in the indices.