Bitcoin is on the verge of a third straight month of losses because of fears that global monetary policy is going to get tighter.
In 2022, some Wall Street banks have planned for five more rate increases from the Fed.
In January, the value of the top cryptocurrency by market value fell 20%. At the time of this writing, the cryptocurrency was trading near $36,960. CoinDesk data shows that prices fell 7% and 19% in November and December.
Genesis Global Trading’s Noelle Acheson said in a LinkedIn post called Did You Say Crypto Winter. She is the head of market insights. The correction is caused by macro factors, such as expected rate increases and tightening of liquidity from the U.S. Fed. Bitcoin and the S&P 500 had a very low 60-day correlation last year. Now, it has more than 65%.
Bitcoin Global Tightening
Last Wednesday, the US Federal Reserve (Fed) set the stage for a faster withdrawal of crisis-era stimulus from the U.S. market. Since then, a number of Wall Street banks, including Goldman Sachs, have planned to raise their interest rates by five quarter percentage points this year.
The market thinks the rate will go up 25 points in March. He told the Financial Times on Friday that a 50-basis point rise in interest rates could happen in March, which would be a big surprise for people.
Certain central banks may follow the Fed’s lead, complicating matters for bitcoin and other risky assets.
With global prices rising, central banks may boost interest rates and support their currencies against the dollar. Buying products with a strong currency saves money and helps control inflation.
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