The U.S. Federal Reserve (Fed) is scheduled to announce its interest rate decision at 2 a.m. on September 22. While investors are waiting for the Fed to raise interest rates, the cryptocurrency market continues to weaken, with Bitcoin falling below $19,000 twice in the past 24 hours pass. Experts have warned that Bitcoin could fall further to $12,000 due to factors such as the Federal Reserve’s interest rate hike and poor inflation data.
The Fed is widely expected to raise interest rates by 3 yards (75 basis points) as the US consumer price index (CPI) in August was less than expected. However, some still worry that the Fed may ignore market expectations and raise interest rates by 4 yards (100 basis points) in order to suppress inflation.
According to CoinGecko market data, Bitcoin has fallen below $19,000 twice in the past 24 hours, and the lowest level has dropped. $18,830.92, as of press time, Bitcoin is still hovering around the $19,000 mark, reported $19,001.67.
With nervousness pervading the market, independent market analyst Michaël van de Poppe said “it’s not that bad”, noting that if Bitcoin can find support at $19,200, the next move is towards $19,800.
Meanwhile, other cryptocurrencies were relatively stable, with Ether, Binance Coin (BNB) and Solana (SOL) all down under 2%, while Cardano (ADA) and Ripple (XRP) were up 1.1% and 7.4%, respectively %.
John Toro, head of trading at digital asset exchange Independent Reserve, said:
If the Fed raises rates by less than 100 basis points, then we are likely to see a small relief rally, but less than 75 basis points, the rebound will be quite strong, however, it seems unlikely that this will be the case occur.
Laura Vidiella del Blanco, vice president of business development and strategy at LedgerPrime, also mentioned that “if the Fed finally raises interest rates by 100 basis points, it could cause great volatility in the cryptocurrency market.”
Notably, Bitcoin fell at least 10% following the Fed’s rate-setting meetings in March, May, and June of this year. Another cryptocurrency analyst, Justin Bennett, said that since the cryptocurrency market began to crash in May this year, Bitcoin has formed a downward trend. He predicts that Bitcoin is on the verge of a sharp decline, likely to its pre-2018 bear market low of $12,000.
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