As hawkish remarks from the US Federal Reserve concerning inflation and the economic slowdown continue to weigh on riskier assets, the price of bitcoin today rose to trade above $20,000 after falling below the level in the previous sessions. At $20,333, the largest and most widely used cryptocurrency was trading slightly higher.
According to recent data, the market capitalization of all cryptocurrencies was again above the $1 trillion threshold today after increasing by almost 2% in the previous day to $1.04 trillion. However, does it indicate a BTC buying opportunity, and how far will the price of digital assets fall? Read on.
Popular cryptocurrency analyst Nicholas Merten predicts that after the most recent economic statement made by Federal Reserve Chair Jerome Powell, the price of digital assets will fall even more.
The Fall in Cryptocurrencies May Deepen
On Friday, Jerome Powell declared that the Federal Reserve would pursue a tight monetary policy in order to boost interest rates and keep inflation in check. Several knowledgeable crypto specialists commented on the announcement after it was made.
According to the DataDash server, which published claims on Youtube, Jerome Powell’s remarks to 515,000 subscribers and the following quotes from his speech will cause the cryptocurrency and other digital assets to suffer more:
In my opinion, the slide in cryptocurrencies will worsen not just after the August 15 short-term correction, but also after the broader bear market correction and monetary tightening policy that followed Jerome Powell’s previous speech.
Furthermore, he said in his statements that the Federal Reserve’s strategy, even if it momentarily hurts the markets, fulfills its objectives by reducing inflation:
To be quite honest, he said that the majority of us have bad opinions of the Federal Reserve. But in terms of monetary policy, the Fed is acting exactly as it should. It evaluates tiny balance reductions and increases interest rates. Even a move of 100 basis points, in his opinion, would be the best the FED could do. It would be preferable to induce shock and awe, which would essentially put the economy on hold for a while, reduce consumer demand in the short term, and restore equilibrium.
Buying Opportunity for Bitcoin
But according to the analyst, now is a good time to buy Bitcoin (BTC) and Ethereum (ETH), the two most popular cryptocurrencies, as a result of the Fed’s actions and the current bear season:
The best part is that there’s a chance that Bitcoin, Ethereum, and other cryptocurrencies will return to their bear market lows and decline even worse. In this instance, it provides investors with some excellent entryways.