Today Bitcoin (BTC) price tumbles again. All this price action is seen ahead of the Federal Reserve’s highly expected rise in interest rates today.
At the moment, Bitcoin is trading at $21,130 with a fall of 5.80% over the last 24hrs.
The flagship currency plunged 15% on Monday, the most in a single day since March 2020. The currency lost over 50 % of its value this year and more than 20% on Friday. It has dropped over 70% since its all-time high of $69,000 in November.
The focus is now on how the currency will respond to a Fed rate rise later in the day. BTC plummeted after the Fed hiked interest rates in May, and it is expected to do so again.
If the current decline continues, technical indicators indicate that Bitcoin price might go as low as $13,000. The coin is also suffering from broader uncertainty in the crypto market.
Fed’s Impact On Bitcoin Price
BTC fell by more than 8% when the Fed hiked interest rates on May 4. It subsequently fell another 28% in the following week, to as low as $28,000, as the crypto crisis worsened.
The Fed hiked rates by 50 basis points (bps) last time. Given the increasing inflation, traders are now preparing for a 75 basis point raise by the Fed, according to CME Group data. If it happens, this will be the Fed’s most aggressive rate rise in near times.
The action will reverse two years of easy financial regulation that had pushed cryptocurrency markets to all-time highs. It also indicates that the central bank is anxious about a possible recession caused by increasing inflation.
Considerably, a recession poses greater difficulty for retail-exposed, risky investments like Bitcoin and cryptocurrency.
Bitcoin Price To Hit $13,000 ?
Bitcoin might go as low as $13,000, according to veteran trader Peter Brandt, as it forms a double top formation. An unfavorable sign from the Fed is likely to confirm this move.
If Bitcoin price falls below $20,000, it will start off a chain reaction of liquidations. This results in more coins being sold on the open market.
In the last two days, the coin’s liquidation stands at approximately $1 billion in holdings. Now this trend is expected to continue.