US FED reconfirmed they are raising rates to get their balance sheet under control. The Bitcoin price dropped below $44K. May drop to $33K if $46K not achieved.
Minutes after the US Federal Reserve reconfirmed in the notes of the December FOMC session that they are going ahead with getting their balance sheet under control, the price of Bitcoin (BTC) dropped below US$44,000. In less than an hour of the announcement, around US$222 million worth of positions were liquidated. After oscillating around the US$46,000 support level in the last few days, the BTC price fell sharply to the US$43,717 level.
Reports say that Fed is likely to start increasing its benchmark rate of interest in March 2022. This means that “balance sheet reduction could start before summer.” Pseudonymous Twitter user Rekt Capital has said that there are:
“many similarities between this BTC range and May 2021… Both saw BTC consolidate inside two Bull Market EMAs (i.e., green 21-week & blue 50-week EMA). If BTC is to repeat history, a capitulation event could take place where BTC briefly deviates below the blue 50 EMA.”
Analyst and trader Michaël van de Poppe believes that the BTC price may go further down if it fails to reclaim the US$46,000 level. He also went on to say that the price of bitcoin could enter an extended bear period if US$46,000 is not reclaimed. In that case, the BTC price could drop to as low as the US$30,000 range.
However, not everyone is bearish about the bitcoin price. Raoul Pal (CEO of Real Vision and former Goldman Sachs hedge fund manager) believes that the market capitalization of the cryptocurrency market will increase from US$2.2 trillion currently to around US$250 trillion in 2030. This means he expects the crypto market to swell by 100-folds by the end of 2030.
Raoul Pal went on to explain by saying:
“If I look at the total derivatives market, it’s $1 quadrillion. I think there’s a reasonable chance of this being a $250 trillion asset class, which is 100X from here, which would be the largest growth of any asset class in all of history in the shortest period of time… That will pretty much dovetail in with the idea that 3.5 billion people are using it — that’s just extrapolating the growth numbers of the network. So if [there are] 3.5 billion users in 2030, well the market cap’s going to be something like $250 trillion.”