June 26, 2022
The future of bitcoin with rising interest rates in the United States

The future of bitcoin with rising interest rates in the United States

The US Federal Reserve on Wednesday raised interest rates by 0.25 percentage points. This is the first interest rate hike in the United States since 2018. The cryptocurrency market, on the other hand, responded “positively” to the news.

Bitcoin has risen from $ 39,000 to about $ 42,000 since the day the interest rate hike was announced. Since the beginning of this year, Bitcoin has been fluctuating between US $ 35,000 and US $ 45,000, maintaining a “lateral” movement, i.e., volatility.

Although Bitcoin is highSense indicators still point Distrust in the market.

Will Bitcoin fall as interest rates rise in the US?

Before the Rise of Interest Rates – The Stories That Are Already Seen in the Ecosystem, Expected by Investors, Are Possible Crypto Market Fall.

The classic movement of the economy, raising interest rates to control inflation and property prices – stop investors from investing in variable returns. On the other hand, if we talk about deflationary assets BitcoinThis connection is going to be broken.

Note that From 2017 to 2018, interest rates began to rise In the United States, but with this movement The price of bitcoin continued to rise In 2017 and early 2018. However, during that time, Bitcoin was in 2017’s best bull cycle.

Chart US01Y – 1 year US bonds. Source: TradingView

In this perspective, the relationship between interest rates and Bitcoin breaks down when Bitcoin is in a positive cycle. However, Some analysts predict a rise in bitcoin this year Despite rising interest rates, the actions of the central banks have created inflation that has not been seen in 40 years.

Remember that Bitcoin continues to cycle – Huge over time – This unique move has never been seen in the 13-year life of digital property. According to some interesting factors that occurred after 2020.

For example, the entry of companies, the widespread adoption of cryptocurrencies, monetary policies (inflation) and the like.

Bitcoin is on the rise, but the market remains hopeless.

One of the most popular indicators of crypto market sentiment is the fear and greed index “Fear“However this Saturday (19), last week it was still in the zone”Serious fear“.

Code of fear and greed
Code of fear and greed

Thus, market sentiment Does not imply any happiness Through this optics. In addition, prominent investors in ecosystems such as Robert Kiyosaki are beginning to devalue digital assets, according to a recent report on Bitcoin. Said What All cryptocurrencies will be confiscated.

Bitcoin volatility has been high since May 2021

The volatility of bitcoin began to rise sharply last month, a movement that has not occurred since May 2021, and in this view, there are signs of price volatility for the coming weeks.

The instability of bitcoin.  Source: Mesari
The instability of bitcoin. Source: Mesari

Finally, despite the distrust in the market, the price of bitcoin remains the same Indicates a long-term rallyMaintaining a tendency to “clean up” market exaggerations (fluids) and high volatility.