Bitcoin price threatens $19.6K as Ray Dalio predicts 30% stock crash

by · September 16, 2022

Bitcoin (BTC) attempted to break local lows on September 16 as the latest cross-crypto decline intensified.

BTC/USD 1-Hour Candlestick Chart (Bitstamp). Source: TradingView

No relief for BTC bulls after merger

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD nearing $19,600 at the time of writing, with buyer support just avoiding a further drop.

The level had held in place as an intraday floor when the Ethereum rally ended, only to trigger a selloff, which took Ether (ETH)/BTC towards three-week lows.

ETH/BTC 1-Day Candlestick Chart (Binance). Source: TradingView

Amid the gloomy mood, traders and analysts showed little inclination to reconsider their market outlook.

“I feel confident in the scenario of quick pumping to 23k on BTC and 1800 on ETH and big dump from there,” Il Capo of Crypto wroteand repeats a long-standing theory:

“Time will tell.”

Warning that the situation “doesn’t look good,” meanwhile, popular account CryptoBullet called for a retracement of the 100-period moving average (MA) to turn bullish on the 4-hour chart.

Fed rate hikes will send stocks tumbling – Dalio

After another day of losses in US stocks, investor Ray Dalio drew some fresh bearish conclusions about what the current inflationary climate would mean for the markets.

Related: Ethereum Traders Short ETH Price in Record Numbers During Merger – 50% Crash Ahead?

In his latest blog post published on September 13, Dalio predicted that the combined damage to stocks would cost them 30% of their current valuation.

– The rise in interest rates will have two types of negative effects on asset prices: 1) the present value discount rate and 2) the decrease in income produced by assets due to a weaker economy. We have to look at both,” he explained:

“What are your estimates for these? I estimate that an increase in interest rates from where they are to about 4.5 percent would have about a 20 percent negative impact on stock prices (on average, but larger for longer duration assets and less for shorter) based on the present value discounting effect and about a 10 percent negative impact from falling income.”

That would spell danger across highly correlated crypto markets, and Bitcoin is thus targeting levels closer to $10,000.

As Cointelegraph reported, this number is currently no stranger to the radar of long-term forecasters.

The Federal Reserve is expected to adopt another rate hike of 75 basis points at next week’s Federal Open Markets Committee (FOMC) meeting, with some market participants expecting as much as 100 basis points, according to data from the CME FedWatch Tool.

Fed target rate probability chart. Source: CME Group

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