Concerns about the risks of interest rate hikes continued to resonate after the change in bias from Federal Reserve Chairman Jerome Powell, who on Thursday opted to move more quickly to combat inflation and said a 50-point hike would basics would be “on the table” when the Fed meets in May.
The idea of ”jumping up” the withdrawal of the US central bank’s overly accommodative monetary policy, which Powell endorsed on Thursday, has also forced traders to reassess the aggressiveness of further rate hikes.
This movement means that investors have preferred to sell their assets, either to protect themselves or take profits. The previous drop in the price of Bitcoin, as reported by CriptoNoticias, was also related to the Fed’s communication about a stricter monetary policy.
The analyst Carlos Maslatón, on the other hand, considered that the sale action is motivated by personal reasons of each investor. Perhaps to take profits or avoid losses on the rise that was up to almost $43,000 just before the drop.
Faced with a more recessive scenario at the global level, investors are looking for stability in the face of the crisis, so they turn to value-protected assets such as the dollar or gold. The main cryptocurrency in the market behaved like a risky asset.
“Since there is no appetite for risk, there would be no new demand for bitcoin and in many cases there would be sales pressures. Above all, in cases where it has been invested with leverage via futures contracts,” explained trader Eduardo Gavotti in CriptoNoticias.
According to his perspective, the price of BTC is being affected by the dynamics of the markets in general that are looking for definition with each other. He precisely indicated that we are in a bear market rally, that is, an upward correction in a bearish environment. Given this situation, he estimates that bitcoin could experience greater falls this quarter, although not in a straight line.
Inflation is a double-edged sword for Bitcoin investors, as the rising price tide and central bank reactions are going to put a lot of pressure on stocks and risk assets at first. Only later, according to various theories, will the tide turn in favor of bitcoin as a store of value.
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Source: Ambito
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