A widely followed crypto analyst says that the actions of the U.S. Federal Reserve will crash Bitcoin (BTC) and the crypto markets in general.
In a new video update, Nicholas Merten, the host of DataDash, tells his 511,000 YouTube subscribers that the Fed may once again cause havoc in the crypto industry by continuing to raise interest rates as a means of countering inflation.
According to Merten, recent testimony from Fed Chair Jerome Powell is likely going to push Bitcoin below the $20,000 level “very soon” as the Fed springs liquidity traps.
“The recent testimonies from Chairman Jerome Powell, from the Federal Reserve, in front of Congress where he was answering questions from Republicans and Democrats and essentially was trying to address why the Fed has taken the stance it’s done on monetary policy…
The Federal Reserve is likely utilizing this kind of flip-flop narrative mechanism that the Fed is commonly known for [during] the greater part of its history where it says one thing and does another to its advantage in order to create liquidity traps to absorb liquidity, or more specifically, to have an excuse to add in liquidity to the system and keep towards its two percent inflation target.
[The Fed] has done this for the greater part of the last decade, the only difference this time around is that it’s utilizing the euphoria and continued optimism as a way to trap liquidity and absorb liquidity from the real economy into financial markets.”
Merten also notes that the past few weeks have proven just how interconnected crypto is with traditional markets and that Bitcoin bulls should be happy to grab BTC between $13,000 and $14,000 if it were to dip that low.
“The past month and a half has been full enough proof that crypto is not separate from everything just yet, and maybe Bitcoin doesn’t go all the way down to $7,000 or $10,000, some kind of large absurd decline which is generally in line with the traditional crypto bear markets, maybe it’s still going to just go to $14,000 or $13,000, I’ll happily wait for that.”
Bitcoin is trading for $22,133 at time of writing, a fractional dip during the last 24 hours.
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