The Federal Reserve, also known as the FED, recently made a decision about its policies, and it seems like this decision has once again affected the price of Bitcoin.
Even though the FED chose not to increase interest rates, the price of Bitcoin didn’t change much this week. Bitcoin has been staying in a price range of $25,000 to $30,000 for quite a while now.
Bitcoin has been different this time compared to previous occasions when it rallied after dropping sharply in March and June. An analyst named Rob Ginsberg from Wolfe Research pointed out that the movement of interest rates can impact assets like Bitcoin, which are considered long-term and speculative.
Bitcoin has faced challenges in bouncing back since it took a hit on August 17. Ginsberg mentioned that if interest rates go up significantly during this new cycle, it wouldn’t be a shock if Bitcoin’s price drops below the $25,000 support level.
Bitcoin’s Price Impact Amidst Fed’s Interest Rate Campaign and Regulation
Last year’s cryptocurrency winter had a unique twist: the Federal Reserve’s efforts to combat inflation by raising interest rates played a significant role in shaping Bitcoin’s price movements.
Although Bitcoin’s value increased by around 60% in 2023, regulatory developments and expectations around Bitcoin exchange-traded funds (ETFs) didn’t push prices much higher.
According to analyst Ginsberg, there’s a chance that if Bitcoin climbs above $28,000, it could go up to $32,000 in the short term. However, Ginsberg remains skeptical about this given recent market trends.
Ginsberg also mentioned that if Bitcoin falls below the $25,000 support level, it might potentially drop to a range between $20,000 and $21,000. He pointed out that rising real interest rates, which have reached high levels, present a significant challenge for speculative assets like cryptocurrencies.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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