Key facts:
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Analyst says investors have been “risk averse” before the rate hike.
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That makes him think that BTC will have a rebound after the rate hike, although others see the opposite.
The expected July 27 interest rate hike in the United States could cause turbulence in markets, including bitcoin (BTC). Although analysts present opposite projections on how its price will unfold. While some believe that the cryptocurrency will have a rebound after the announcement, others envision a decline.
Griffin Ardern, the volatility trader at crypto asset management firm Blofin, foresees a fall in the price of bitcoin after the increase in rates. “Considering that the overall risk level of the crypto market has not returned to a reasonable level, it is very likely that the price of BTC will fall more than 10% after the Fed rate hike,” he said.
From different eyes, Dick Lo, the founder and CEO of the trading firm TDX Strategie, sees the landscape differently. He considers that the increase in interest rates could lead to a rebound in the price of bitcoin and other cryptocurrencies. In addition, it highlights that ether (ETH) could benefit from a higher rise.
“Bitcoin and the broader cryptocurrency market may see another relief rally following the 75 basis point rate hike. After that we expect markets to trade sideways while ether may outperform in anticipation of the merger,” he said.
Something that motivates him to think about a hike is that he sees that investors have shown a risk-averse approach before the interest rate hike. This is what the last few days have looked like decrease in demand reported by CriptoNoticias which took bitcoin from $24,000 to below $21,000.
The cryptocurrency market is attentive to the rise in interest rates in the United States
As for trader and analyst Alex Kruger, he projects that the cryptocurrency market could see a small rebound after a 75-point rate increase. However, he warns that there will be a drop if the increase is higher.
So too, specialist Wendy O commented what, with an increase of 75 basis points, we should not see any negative effects on the market. But consider that if it is bigger or the second quarter GDP report is released, then bitcoin and other cryptocurrencies could take a hit.
Similarly, Joshua Fernando, the CEO of eCarbon, said: “75 basis points seems to be the consensus, so if we see something noticeably higher and it kills the stock market, then I would expect the crypto market to do so. same”.
Likewise, speculates that there will be no price drop in the cryptocurrency market if the interest rate increase is lower. He summarized that the most important thing will be the direction given by the Fed. “If the Fed signals strong rate increases until 2023, expect more pain in the markets,” he concluded.