Bitcoin: Crypto Strategist warns BTC will continue to fall if this condition is not reached
Prominent crypto analyst Nicholas Merten says that Bitcoin (BTC) price could drop as long as the US Federal Reserve remains positive.
“In the past, [the Fed] has lowered rates and printed a ton of money – quantitative easing. Now it is doing the opposite through quantitative adjustment. It is raising interest rates at the fastest rate it has done in decades since rates collapsed in the 1980s...
And on top of that, they're starting to lose weight. They're starting, month by month, to start selling down US Treasuries and may eventually start selling mortgage-backed securities... Tens, if not hundreds, of millions of dollars, evaporated from the money supply. The Fed is selling those assets for cash, and the cash is running out. It is exiting the money supply. "
Merten also said that Bitcoin is likely to experience more selling pressure until the Federal Reserve achieves its goal of keeping inflation in check.
“The Fed is on the right track. But you need to be in the driver's seat during cooling inflation. And because those principles being implemented here are higher interest rates and quantitative tightening through balance sheet reduction, here's why Bitcoin is falling, and as long as it continues to set high or lower until it is given the specific circumstances the Fed is looking at because. so maybe they are starting to cool down inflation as the economy is starting to slow down enough that they can get inflation back to the 2% target…. At the end of the day, that's what the Fed is after, and until they hit those goals, they're not going to start turning. "
Merten said the Fed's current trajectory could push Bitcoin as low as $10,000 to $12,000 in the price range but said that's where the big opportunity lies for BTC bulls.
“When we have that range, no one will want to buy Bitcoin. People will think that crypto will be zero. It's over. It has. That's the kind of scope that I really enjoy. Surprising surrender. That's where you get the chance to make a generational purchase when no one else is willing to pull the trigger, but you will. "
At the time of writing, Bitcoin is trading at $19,612.
Oct 09, 2022