Crypto Market In Panic Ahead Of FED Meeting, Will It See Relief Or More Pain?
June 15 2022 - 12:25PM
NEWSBTC
The crypto market could face more volatility during today’s trading
session. The U.S. Federal Reserve is set to host its Federal Open
Market Committee (FOMC) meeting and possibly announce a hardline
approach to combat inflation. Related Reading | Bitcoin
Miners’ Exchange Flow Rises To Seven-Month High Amid Bloodbath
Inflation metrics have been at their 40-year high versus the U.S.
dollar. Thus, investors expect the financial institution to
announce a hawkish monetary policy to try and bring down inflation
which has been impacting the crypto market and risk-on assets. At
the time of writing, Bitcoin is barely hanging above $20,000 and
records a 33% loss in the last week. Ethereum records a 40% loss
over the same period with smaller cryptocurrencies trading in the
red. Trading desk QCP Capital recently posted a market update
highlighting the levels of panic in the crypto market. As Bitcoin
and other larger cryptocurrencies trended to the downside, major
crypto companies failed to meet their financial obligations. The
recent evens followed a catastrophic collapse in the Terra
ecosystem which already set the stage for a soft market to see
further losses. Now, lending and borrowing platform Celsius halted
all withdrawals, and Coinbase and BlockFi fired 18% of their
personnel. In a letter to his employees, Coinbase CEO Brian
Armstrong spoke of an imminent economic recession. These events
contributed to the crypto market selloffs. QCP Capital said: These
are record levels for the year, reflecting the heightened panic in
the market as we head into FOMC in a few hours. Markets have
revised expectations for the FOMC rate hike from 50 bps to 75 bps.
Markets are rightly worried that the Fed might be prioritizing
inflation over recession concerns. In other words, the FED could
choose to stop inflation regardless of spilling more blood in the
traditional market. Will The Crypto Market See More Violence?
However, QCP Capital believes there is a possibility for some
relief in the short term. This move to the upside could be
supported by the high amount of leverage positions that suffered
liquidations during the recent downside move. In addition, Bitcoin
is trading above its previous all-time high which has often
operated as a major area of support. This could provide bulls with
more breathing room as selling pressure declines. QCP Capital
added: The market seems to be at max bearishness right now and any
dovish indication from Fed could trigger a short squeeze. While
everyone is focused on the negative headlines, a sharp move higher
could catch the market by surprise. Related Reading | Bitcoin
Crash Sends Institutional Investors Running For The Hills The FED
meeting will take place in less than an hour and could push Bitcoin
and the crypto market back to their pre-2020 range. This could see
BTC’s price trading in the $10,000 levels, but as of right now,
$20,000 is holding.
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