There will be no sharp correction following any potential interest rate cuts by the U.S. central bank in September or November.
This is the prediction from analyst ‘RamenPanda’ who explained their thinking in a lengthy post on X on June 27.
The analyst noted that during times of financial crisis, such as in 2008, the Fed cuts rates to preserve the economy. However, in that scenario, markets fared worse, and stocks fell following the cuts.
There is also another uncommon scenario in which the Fed cuts rates when the economy is doing reasonably well but rates are too high. They are currently at 5.25% to 5.5% where they have been for the past year.
This would lead to a boom similar to that in 1995 when the Fed cut rates, sparking the dot com bubble over the next few years. This led to a flurry of investment in internet-related assets and the same could occur for crypto and AI-related assets this year, he opined.
It has been reported that BTC market movements are correlated with U.S. inflation data or Consumer Price Index (CPI) reports. These are heavily influential on Fed policy and its decisions to drop rates or leave them the same.
Earlier this week, analyst Willy Woo said that assets such as gold, stocks, and Bitcoin are a good way to beat CPI and monetary debasement.
Nevertheless, there could be more short-term pain before any significant gains. According to head of research at 10x Research, Markus Thielen, BTC could fall to $55,000 during this correction.
On June 28, he said that “weekly and monthly reversal indicators signal a broader correction.” BTC retraced 19% from its all-time high this week in a fall below $60,000 this week. However, it has not reached the current cycle average yet, which is around 22%, which would be a fall to $57,500.
If Thielen’s prediction comes to pass, the correction would be deeper at 25%, or an even deeper 32% if it falls to $50,000.
The post Crypto Analyst Compares 2024 to 1995, Forecasts Bitcoin Bubble on the Horizon appeared first on CryptoPotato.
This is the prediction from analyst ‘RamenPanda’ who explained their thinking in a lengthy post on X on June 27.
The analyst noted that during times of financial crisis, such as in 2008, the Fed cuts rates to preserve the economy. However, in that scenario, markets fared worse, and stocks fell following the cuts.
Bitcoin Boom Following Rate Cuts
There is also another uncommon scenario in which the Fed cuts rates when the economy is doing reasonably well but rates are too high. They are currently at 5.25% to 5.5% where they have been for the past year.
This would lead to a boom similar to that in 1995 when the Fed cut rates, sparking the dot com bubble over the next few years. This led to a flurry of investment in internet-related assets and the same could occur for crypto and AI-related assets this year, he opined.
It has been reported that BTC market movements are correlated with U.S. inflation data or Consumer Price Index (CPI) reports. These are heavily influential on Fed policy and its decisions to drop rates or leave them the same.
Earlier this week, analyst Willy Woo said that assets such as gold, stocks, and Bitcoin are a good way to beat CPI and monetary debasement.
Not So Fast…
Nevertheless, there could be more short-term pain before any significant gains. According to head of research at 10x Research, Markus Thielen, BTC could fall to $55,000 during this correction.
On June 28, he said that “weekly and monthly reversal indicators signal a broader correction.” BTC retraced 19% from its all-time high this week in a fall below $60,000 this week. However, it has not reached the current cycle average yet, which is around 22%, which would be a fall to $57,500.
If Thielen’s prediction comes to pass, the correction would be deeper at 25%, or an even deeper 32% if it falls to $50,000.
The post Crypto Analyst Compares 2024 to 1995, Forecasts Bitcoin Bubble on the Horizon appeared first on CryptoPotato.
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