Benjamin Cowen as investors begin to expect the Federal Reserve to ease tight monetary policies in the coming months Bitcoin He stated that he updated his prediction about (BTC).
Benjamin Cowensays that once the Fed starts to cut interest rates, which CME’s FedWatch Tool suggests could happen as early as March, risk assets like Bitcoin could actually lose value.
When interest rate cuts come, this often does not create a bullish trend for risk assets; This is not because interest rate cuts are not bullish on their own, but because interest rate cuts are theoretically bullish.
However, according to Cowen, the main source of the problem is not the interest rate cuts, but why these cuts are made. As we reported as Koinfinans.com, while inflation in the USA is still above the desired levels, the FED’s decision to reduce interest rate increases is receiving interesting comments.
If you look at the S&P 500 or risk assets in general, sometimes they peak well before interest rate cuts come. Sometimes they peak a little after interest rate cuts come in, but in most cases interest rate cuts have not been a great thing for risky assets, at least in the short term.
When it becomes a good thing for risk assets is when you get to the last rate cut… Because when you get to the last rate cut, it basically means that the market thinks the Fed has done enough and they’ve gone back to loose enough monetary policy to get the economy back on track.
NEWS CONTINUES BELOW
Cowen also warns that Bitcoin could fall to test levels within the bull market support band formed by the 20-week simple moving average (SMA) and the 21-week exponential moving average (EMA).