Coinmarketbag Crypto
The crypto market crash started with the Feds and its battle against inflation. The announcement to raise interest rates sparked panic that raised doubts among crypto investors. When the Federal Reserve implemented the plan, the overall financial markets, including crypto, collapsed.
Another factor that helped drive crypto prices down was the Terra Luna USDT crash. The algorithmic stablecoin depegged, leading to huge losses that plunged the market into oblivion. Since then, crypto prices have fluctuated in a terribly prolonged crypto winter.
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Cryptos like Bitcoin and Ethereum lost their huge gains and many crypto projects disappeared completely.
But summer hasn’t been good either
Some analysts speculated a price rally as the market lamented the ongoing crypto winter. But unfortunately, these predictions seem to have slowed down as the crypto market registers more fluctuations.
Bitcoin, for example, has lost more than 37% since the market’s downtrend. June 2022 brought many price crashes for the currency like never before. The following month, July saw a small gain of 17% in BTC price, but that rally was short-lived. The coin lost everything and is now trading below $20.
Bitcoin plunged even deeper on September 7 when the price plummeted below $19K; it recovered quickly. So what’s the way forward for the number one cryptocurrency?
Analyst suggests solution for BTC recovery
While investors await a price rally for Bitcoin and others, an analyst has indicated that such an event depends on the Federal Reserve.
Dan Nathan, the director of RiskReversal Advisors, stated this on CNBC’s popular “Fast Money” episode. According to Nathan, Bitcoin can only reverse into a bullish trend if the Feds change their stance on tackling inflation.
Recall that at the last annual meeting of the Federal Reserve on August 26, 2022, Jerome H Powell gave a speech that worried investors. The FBI president has said he will be more aggressive in the fight against inflation.
Before the meeting, Neel Kashkari suggested that the Vokcker approach. Given that Kashkari was initially meek in his demeanor, the crypto community became apprehensive. Powell heightened the panic when he announced the agency would step up its strategies. So the chances of the FBI twisting its approach is far-fetched.
To say that this outplay impacted crypto prices is an understatement. Many coins started a downtrend from that day and are still going so far. The short-lived rallies are no match for the frequent pullback.
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Bitcoin dominance has fallen to its all-time low. Nathan even stated that the coin is currently trading as a regular stock. So a rally for the number one crypto may not be possible in 2022 as the FBI is not about to turn.
Featured image from Pixabay and chart from TradingView.com
