“In the Line of Sight” – A New $100 Billion Fed Quake Now Looms for the Price of Bitcoin, Ethereum and Crypto

[ad_1]

BitcoinBTC and Ethereum, the two biggest cryptocurrencies, saw their New Year’s rallies stall amid fears that “Operation Choke Point 2.0” is about to hit the crypto space.

Subscribe now to Forbes CryptoAsset & Blockchain Advisor and successfully navigate the latest bitcoin and crypto market crash

Bitcoin price has rebounded from its December lows as traders bet that the US Federal Reserve could be on the verge of declaring victory in its war against soaring inflation, helping the price of ethereum and d other major cryptocurrencies to rally, with some predicting that smaller coins could head sharply higher.

Now bitcoin, ethereum and crypto markets are braced for next week’s US inflation data, with concerns growing it could be higher than markets expect, potentially triggering a new wave of volatility after 2023 was declared “the year of opportunity”.

A brutal bear market is when you need up-to-date information the most! Sign up now for the free CryptoCodex, a daily newsletter for traders, investors and the crypto-curious that will keep you ahead of the market

MORE FROM FORBES Binance CEO Issues ‘Existential’ Warning After Wild Bitcoin, Ethereum and Crypto Price SwingsBy Billy Bambrough

The price of bitcoin has been swinging wildly over the past few months, crashing to recent lows before bouncing back… [+] back and pulling the price of Ethereum with it.

SOPA Images/LightRocket via Getty Images

“The Fed is on guard, waiting for any further data shocks before it can judge that it has the upper hand in its fight against inflation,” said Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, in emailed comments, adding the Fed Chairman. Jerome Powell indicated this week that “the process of reducing the price spiral has only just begun and could last at least until next year”.

The latest U.S. consumer price index (CPI) report was released on Tuesday, February 14, with market prices rising 0.4%, according to a Reuters poll.

Last week, the University of Michigan survey’s inflation outlook, a measure Powell has previously shown on the Fed’s tracks, returned the highest reading since January 2022, suggesting households s expect higher inflation to persist over the coming year.

As a result, the impending CPI report has been “put in the spotlight,” Mazen Issa, senior strategist at TD Securities, told Reuters. A hotter-than-expected inflation report could mean the Fed opts for a bigger rate hike next month in an effort to suck more liquidity out of the system.

The Fed has slowed the pace of its interest rate hikes in recent months after raising rates in response to inflation soaring to a 40-year high last year.

Sign up now for CryptoCodex—A free daily newsletter for the crypto-curious

MORE FROM FORBESLegendary Billionaire Proposes Radical, ‘Inflation-Linked’ Crypto Rival Beating Dollar to Bitcoin and Ethereum After Extreme Price SwingsBy Billy Bambrough

The price of bitcoin is down about 50% from this time last year, but has recently started to climb… [+] its recent lows, dragging with it the price of Ethereum.

Forbes Digital Assets

Earlier this week, Powell, speaking just days after markets were rocked by the latest “extraordinarily strong” US jobs report, said it would likely take a “significant period” to completely stamp out the job. inflation due.

Traders were always inclined to interpret his comments as dovish, however, due to his statement, the “disinflationary process” has now “begun”.

[ad_2]