What happened four years ago coincided with the Fed taking its foot off the tightening pedal. Bitcoin is up almost 40% in January and the Fed expects the rate to slow further in the months ahead
Bitcoin (BTC) could be poised for a major upward move if history is any guide, with the recent rally coinciding with the 2019 bullish revival that saw the price in – an increase of almost 250%.
The leading cryptocurrency in market value jumped nearly 40% to $23,000 this month, according to data from CoinDesk. The rally follows a year-long slump that has brought the stock down 68%, followed by an extension into the bear market at around $18,000 and comes as the US Federal Reserve nears the end of its easing cycle. its water that caused a dangerous treasure. , including cryptocurrencies.
These conditions echo those that led to the bullish revival of bitcoin in the second quarter of 2019. Then the price went up 247% to $13,800 as the Fed’s rate hikes.
“In the four months leading up to the 2019 session, BTC is trading strongly near the lows as shorts take advantage while strong hands converge,” said a macro trader. said. Geo Chen and Jan. 20 editions of the popular Fidenza Macro Substack magazine, announcing the convergence between prices in 2019 and 2023. with the tightening pedal.”
The Fed’s previous suspension period lasted three years. It began in December 2015 and ended in December 2018, and raised the central bank’s lending rate to a range of 2.25% to 2.5%.
The previous Fed shutdown lasted three years. It began in December 2015 and ended in December 2018, and raised the central bank’s lending rate to a range of 2.25% to 2.5%.
Last year, the Fed raised the benchmark lending rate from 0% to 4.25%. The market is now expected to reduce the speed of the high rate to 25 basis points in February and March and stop its upward trend as the forward-looking indicators show a slowdown in growth and economic activity.
The sale fatigue seen last November in a bullish reversal consistent with bitcoin’s record of hitting the bottom 17 months before mining wages halving and rally in the year before. Bitcoin’s fourth halving, a time code that reduces the speed of supply expansion by 50% every four years, is expected to take place in March or April.
All things considered, the path of least resistance to bitcoin seems to be the most advanced. Still, Chen prefers to buy ether (ETH), the second largest cryptocurrency by market value compared to bitcoin.
“I think there is more potential for ETH than BTC because the correlation has not been completed due to the bear market,” Chen said. “I also believe that Web3 and DeFi (decentralized money) will continue to be the main source of progress in the crypto ecosystem, and many Web3 and DeFi use ETH as their storage. BTC will -continues to maintain a safe haven. small beta currency against ETH.”
Chen took a long position on ETH/USD and expects Ether to rise as high as $3,400 in the next three months.