Bitcoin and Ethereum have come under heavy pressure this year as the Federal Reserve raises interest rates to levels not seen in over a decade (although Elon Musk gave a small cryptocurrency a price boost of 300%).
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The price of bitcoin, after surging to nearly $70,000 per bitcoin last year, crashed to around $17,000 while the price of ethereum suffered a similar selloff, which brought an investor legendary to issue a shock price prediction.
Now ‘desperate’ traders and investors are nervously waiting for Fed Chairman Jerome Powell to deliver a speech in which he may signal a slowdown in rate hikes followed by Friday’s US jobs report which will likely influence the upcoming Fed meeting next month.
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“Investors will be watching Fed Chairman Jerome Powell’s indices closely during his speech later in Washington, DC,” wrote Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, in comments by mail. electronic. Powell speaks Wednesday afternoon at the Brookings Institution amid rising expectations of a recession and signs of slowing inflation.
After four consecutive interest rate hikes of 0.75 percentage points this year, the futures market has estimated a roughly 70% chance that the Fed will make a 0.5 percentage point hike at its February meeting. december. Friday’s jobs report is expected to show an addition of 200,000, down from 261,000 last month, which would be the lowest number of 2022 and give the Fed further reason to ease its hawkish approach.
“They are desperate for guidance on the trajectory of rate hikes and how far they will need to go to bring down the price spiral. is still expected in December as the tightening cycle is seen as far from over.”
The Federal Reserve embarked on a brutal series of interest rate hikes this year designed to suck liquidity from the system after it was flooded with liquidity during the Covid crisis.
Tighter monetary policy sent stock markets plummeting over the past two years and wiping roughly $2 trillion from the previously hot bitcoin, ethereum and crypto market combined.
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However, investors are increasingly predicting markets to bottom, with some predicting a bitcoin price rally in 2023 that is “more stable” than the “high octane rush” of 2021.
“Confidence is returning to the markets,” Nigel Green, chief executive of deVere Group, said via email. “We anticipate that as the program unfolds, which is expected to take place in the second quarter of 2023, it will be the assets that will see some of the biggest rallies.”
However, “the high octane rush from previous rallies is unlikely, instead we will see a more stable and continued upward trajectory for bitcoin as the unwind begins,” Green added.