A widely followed crypto analyst says the actions of the US 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 could once again wreak havoc on the crypto industry by continuing to raise interest rates to fight inflation.
According to Merten, recent testimony from Fed Chairman Jerome Powell is likely to push Bitcoin below the $20,000 level “very soon” as the Fed opens liquidity traps.
“The recent testimony from Federal Reserve Chairman Jerome Powell to Congress, where he answered questions from Republicans and Democrats and essentially tried to address why the Fed has taken the stance on monetary policy…
The Federal Reserve probably uses this kind of flip-flop story mechanism that the Fed is commonly known for [during] most of its history where it says one thing and does another in its favor to create liquidity traps to absorb liquidity, or more specifically, to have an excuse to add liquidity to the system and its inflation target of keep two percent.
[The Fed] has been doing this for most of the past decade, the only difference this time is that it uses the euphoria and sustained optimism as a way to lock in liquidity and absorb liquidity from the real economy to the financial markets.”
Merten also notes that the past few weeks have proven just how intertwined crypto is with traditional markets and that Bitcoin bulls would be happy to grab BTC between $13,000 and $14,000 if it went this low.
“The past month and a half has been proof enough that crypto is not yet unattached, and maybe Bitcoin isn’t going all the way down to $7,000 or $10,000, some sort of big absurd drop that’s generally consistent with traditional crypto bear markets, maybe it will still just go to $14,000 or $13,000, I’m happy to wait for that.
Bitcoin is trading at $22,133 at the time of writing, a fractional dip in the past 24 hours.
Don’t Miss Out – Subscribe to receive crypto email alerts delivered straight to your inbox
Check price action
follow us on TwitterFacebook and Telegram
Surf the Daily Hodl mix
Disclaimer: Opinions expressed on The Daily Hodl are not investment advice. Investors should do their due diligence before making risky investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and transactions are at your own risk and any losses you incur are your responsibility. The Daily Hodl does not recommend buying or selling cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured image: Shutterstock/PHOTOGRIN