‘A New Market Regime’ – The Fed May Have Just Triggered a $100 Billion Bitcoin Price Rally as Ethereum Rebounds
BitcoinBTC has climbed after the Federal Reserve followed through on its well-telegraphed 10th consecutive rate hike – with traders now turning to a looming $31.4 trillion problem.
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Bitcoin price has returned to within touching distance of $30,000 per bitcoin despite sudden fears that China, US President Joe Biden and the Fed may be about to “destroy all value of bitcoin.” EthereumETH, the second largest cryptocurrency after bitcoin, has also rallied and climbed back towards heights not seen since last summer (even after founder Vitalik Buterin issued a bull run warning).
Now, bullish bitcoin and crypto price analysts have predicted that the Federal Reserve’s 10th hike could be the last in this cycle — potentially setting bitcoin up for a “strong rally.”
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“While the Fed has raised interest rates by another 25 basis points, the likelihood that this was the last increase for this cycle is high, which could set the market up for another strong rally,” Markus Thielen, head of research at crypto-services provider Matrixport, wrote in an email message.
Thielen predicts that the bitcoin price could now increase by 20% before mid-June, potentially making one bitcoin worth $35,000 and adding $100 billion to the bitcoin market cap.
“At the same time, we see continuous bank failures, which require liquidity subsidies and guarantees from the government for any acquirer,” Thielen added, referring to the ongoing regional US banking crisis that has now hit the PacWest after pushing First Republic over the edge. week.
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Meanwhile, growing instability in the banking sector is adding to bitcoin’s appeal, according to Decentral Park Capital portfolio manager Lewis Harland.
“You see better performance for bitcoin in the crypto market as regional bank share prices collapse. This signals that bitcoin is a high-quality anti-dollar liquid play for investors as the crisis unfolds,” Harland said Coindeskadding bitcoin dominance, a measure of bitcoin’s value compared to the broader cryptocurrency market, is now near the upper end of its multi-year range.
“A break of 50% is likely to signal a new market regime of prolonged bitcoin outperformance in the market.”
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