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Bitcoin falls before Fed rate rise amid $9T balance sheet warning

Bitcoin could lose more money if the government cuts its balance sheet, an analyst says.

During the opening of Wall Street, Bitcoin (BTC) fell because people were nervous about what the United States Federal Reserve was going to say in the next few days.

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Trader: Bitcoin makes sense to chop and then break out.

Data from Cointelegraph Markets Pro and TradingView show that BTC/USD fell quickly at the start of trading. Bitstamp saw a low of $43,312 at the start of trading.

People were waiting for the Fed to give them information about inflation, asset purchases, and interest rates. The pair had hit $44,500 overnight.

Bitcoin and other altcoins are very closely linked to the stock market, which means that a rise in interest rates could have the same effect on crypto investors as it does on the stock market.

As of 7pm UTC, the written report will cover a Federal Open Market Committee meeting from late January.

People at Bloomberg Intelligence were commenting on the event, and Gina Martin Adams, chief equity strategist, said that cutting back on the Fed’s balance sheet would be bad for the stock market more than a rise in interest rates.

“Still, I’m more worried about the balance sheet than about the rate hikes that the government is going to make. Between 2010 and now, changes in the balance sheet have played a big role in how the market’s multiple changed. Every 100-bp drop in the balance sheet could cut 29 bps off the S&P 500’s forward P/E by 29 bps “She said that.

Among crypto traders, the mood was one of near caution against a general sense of caution.

A popular Twitter account called Crypto Chase said this in a post last night: “Still believe there is more upside to come, but a short-term pullback and/or chop before major resistances are broken makes sense sooner rather than later.”

Rekt Capital, on the other hand, was paying more attention to the long-term charts than the hourly charts. After last Sunday’s bad news, the coming weekly close still had the chance to show that an uptrend was in the works.

BTC bids inch higher

A look at the order book composition from the big exchange Binance on the day showed even more good news.

The last 24 hours have seen more buy support open at $43,000, as well as a bigger support zone just below $42,000.

Also, Material Indicators, a company that studies the supply chain, found that sell-side orders at $45,000 were slowly getting smaller.

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Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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