Popular cryptoanalyst Nicholas Merten says that the short-term fate of Bitcoin (BTC) in the coming weeks will depend on two key macroeconomic events.
In a new video update, the host of DataDash tells his 511,000 YouTube subscribers that the market is awaiting the Consumer Price Index (CPI) report and the final Federal Reserve meeting of the year, both scheduled for this week.
“Why don’t people buy the dip? The reason, in my opinion, is what’s coming up here next week and that has to do with the upcoming inflation numbers from the CPI report as well as the Fed at the FOMC meeting.”
The CPI report will be released on December 12, while the Federal Open Market Committee (FOMC) meeting will take place on December 1[ads1]4. Merten says the CPI report, often a draw for crypto markets, is likely to reveal higher than expected inflation data.
Merten says that while over 80% of the market expects the Fed to raise interest rates by 50 basis points, the increase could be higher depending on the CPI report.
“If the Federal Reserve sees a big upset in the CPI to the downside, meaning that inflation is still incredibly high month-to-month and that the annual target that they aim to reach of 2% is still a long way off, they may well another 75 basis point hike. They might want to prove that they’re going to do what’s necessary to get inflation under the curve right here, right now.”
The analyst says that even if the Fed chooses a lower-than-expected rate hike, the markets will still be under pressure.
“Does this mean the market is just bailed out immediately? Does this mean we’re starting the next bull run?
No. In fact, if we look at previous bear markets, even when the Fed starts to swing and starts to lower the federal funds rate by several points, you’ll see that stocks still went down. It still underperformed because again, to the point where people say these things have lagged effects, you can’t just come in immediately, cut the interest rate and save the day.”
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