SHOULD WE CELEBRATE? OR...?
Bitcoin and Ether are going up. Already?
Coo! It's a Crypto Owl. I bet you're all eager to find out what's going on in the crypto world today. No spoilers yet, let’s jump straight to it.
On Today's Menu:
🕛 Estimated read time: 2 minutes & 55 seconds
🌯 SPICY BURRITO: Is this a good sign for Bitcoin or is it dead cat bounce?
🥛 GLASS OF MILK: Top 6 Crypto News from around the web
IS THIS A GOOD SIGN FOR BITCOIN OR IS IT A DEAD CAT BOUNCE?
Soooo. It seems like we’re finally seeing a little sunbeam after a dark and gloomy period in the crypto sky.
Just yesterday *15th of June* Bitcoin hit its lowest point dropping to $20k. This was painful.
Today *16th of June* it rebounded to ~$22.8k. This is less painful (portfolios are still burning red).
Now, this happened because of the good ol’ FED (or, Central Bank/Federal Reserve). Talks about regulating inflation rates and saving the economy are continuing for a long time. So, now the FED tightens everything.
Today the US Federal Reserve raised rates by 75 basis points (bps). Crypto market reacted immediately. It took only 1 hour for Bitcoin to rise 2%, and Ether to 6%! As I said - definitely a sunbeam for all of us.
In today’s FED statement it is also said the Central Bank is aiming to continue reducing its holdings of agency debt, Treasury securities, and mortgage-backed securities, while repeating that it is “strongly committed” to bringing inflation back to its 2% target (just a reminder - now its reaching ~8.6%). Atm, rate cuts are only expected by 2024. We’ll see how it goes.
In the meantime, check this out! Apparently this hike is the largest since 1994! And, the Fed informed that it is very likely to be more of those.
Chairman of FED, Jerome Powell, cited this data as a concern. He noted that recent hikes were too light to slow the inflation, and only did the opposite - increased it even more.
Powell has also added (in a different interview) that if the Central Bank does not see “clear and convincing evidence that inflation pressures are abating,” it will “consider moving even more aggressively.”
But then, what’s next? Let’s take a flying bird’s view on this one.
World economy faces some serious struggles (inflation is high, tightening monetary, and so on), so the atmosphere is not the most cozy and welcoming;
Bearish market doesn’t mean going down only in the graphs. It’s a downward market cycle full of ups and downs that could last very long until it moves back to the bullish direction;
Bitcoin has moved past this tough $20k zone. And this certainly gives people hope that it reached the bottom and the worst is behind us. However, it’s unlikely to be the case as markets still have to properly adjust to everything that has been happening lately on the crypto horizons;
Now, this sudden market “recovery” can be viewed as a typical dead cat bounce. Meaning we think that this is a good sign and that the market will start only to go up from now on; however, we should not forget that we just recently entered this bear market territory and that this price rebound can be a false alert and signal of a much bigger dip around the corner;
Time to be patient continues. If a rebound was truly a shift in momentum, we’ll still have plenty of opportunities in the days to come. In the meantime, relax and watch it unfold. Period.
TOP 6 CRYPTO NEWS FROM AROUND THE WEB
LITTLE SNACK
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Disclaimer: This newsletter is strictly educational. None of this information is intended to be financial advice. Always do your own research and act responsibly with your profits.