Urgent: bleak expectations indicate the collapse of digital currencies to these levels
Bitcoin has recently been hit by higher-than-expected US inflation data and has so far failed to recover from the setback. Bitcoin came under fresh pressure, Ahead of the Fed's interest rate decision on Wednesday.
Interest and cryptocurrency
The market priced another rate hike of 0.75%, but it can't be ruled out that a hike to 1.0% as well.
Given this, riskier assets like cryptocurrencies also react negatively to the upcoming event.
Bloomberg analyst Mike McGlone said:
"The Fed is not going to ease anytime soon. It's a typical human reaction to its wrong decisions, now we have the advantage of knowing how many mistakes the Fed made while easing monetary policy excessively."
Goldman Sachs (NYSE:GS) had previously expected to raise interest rates by 0.5% and 0.25% in September and November. Meanwhile, these forecasts have been changed under the supervision of Jan Hatzius so that the interest rate is now assumed to rise by 0.75% and 0.5%.
Bitcoin options that expire at the end of the year reveal that most traders are betting on BTC dropping to the $10,000-12,000 range.
This scenario coincides with the assessment of Sharon Bell, an analyst at Goldman Sachs. She thinks stock markets could drop another 26% if the Federal Reserve becomes more aggressive in fighting inflation.
Bitcoin technical levels
Bitcoin price is down -7.80% in the past 24 hours to $18,491 while the total weekly loss is -16.62%.
The 78.6% Fib retracement support level of $19,251 was broken, opening the way for a test of the session low at $17,630. so the downside momentum can expand immediately. because The RSI hasn't reached the oversold territory yet,
Short-term losses can only be prevented if the bulls manage to sustainably overcome the 78.6% Fibonacci retracement resistance level. Above this level, focus will then shift to the psychological $20,000 level and the 61.8% Fibonacci retracement at $20,523.
The World Bank expresses its concerns about the stagnation of the global economy
World Bank President David Malpass spoke in press statements today about the global economic recession, and the following are his statements:
The World Bank is concerned about the global economic slowdown.
The global recession may continue beyond 2023.
A strong dollar is one of the main components that underpin US financial markets.
Earlier, World Bank President David Malpass said today that the lack of progress by the world's largest economies in relieving the debt burden of the poorest countries while increasing borrowing costs will exacerbate poverty and instability rates.
Malpass added in a TV interview that debt relief is of great importance to the world because interest rates are rising. The head of the World Bank Group explained that debt was already very stressful, and now countries are suffering from currency devaluation, which is causing inflation.
Urgent: Harvard expert .. "The recession is better than inflation" and you must raise the interest quickly
Harvard Economic expert Larry Samars said that the Federal Reserve should continue to raise interest rates instead of slow moves that will not contribute to resolving the crisis.
"Only 15 months ago, the Federal Reserve was saying that the price would be zero in mid -2023," said Larry Samarz about the bank's basic interest rate, which is now 2.5 %.
As a result of the Harvard University economist, the reduction of the inflation curve will require more cash restrictions.
"It will not be easy to do what is necessary," said Samarz.
Strong intervention
"I do not know any major example in which the central bank responded excessively on inflation and paying a large cost, adding that the most important example of these costs is the period of high inflation during the 1970s."
The Federal Reserve raised the interest rate for the first time by 25 basis points in March, followed by 50 basis points in May, then, in June, interest rates raised 75 other basis points, which is its largest increase since 1994, followed by a similar increase by 75 Foundation in July.
The recession is better than inflation
Samarz has argued that recession through a strict economic policy would be better than long -term enlargement, and said, "With regard to reducing the risk of an inflationary catastrophe, the Federal Reserve should be ready to continue the track."
The head of the Federal Reserve, Jerome Powell, said that the bank needs to see an important evidence that inflation is under control before it starts to reduce interest rates again.
In August, the consumer price index increased by 0.1 % compared to July, as the inflation rate reached 8.3 % on an annual basis.
Shocking data
"For me, she was not welcome, but she was not completely unexpected," said Harvard Economist Larry Samars.
"I think the correct reading of the data all the time was that the main inflation is greatly fluctuating, but we have a major essential inflation problem," Samarz added.
"The problem of inflation inherent will be difficult to control ... this is not done without a fundamental amendment to the monetary policy, and the market wakes up to this fact," he said.
Pricing interest
The future inflation forecast for American consumers fell to its lowest level in one year in September; It reduces fears that the federal reserve may raise interest rates in full point.
However, expectations about the federal increase in interest rates by 100 points jumped from scratch to 30% after inflation data was released last week.