The markets, including bitcoin (BTC), opened the week lower due to the expected increase in interest rates in the United States scheduled for Wednesday, September 21. But what will happen following this event that seeks to counteract inflation? Could it cause a rise or sharpen the fall?
The trader Eduardo Gavotti told CriptoNoticias that he believes that “the markets react more strongly to the uncertain.” He therefore he warns that if the announcement of interest rates is in line with expectations, it is possible that there will be no major reaction. And he points out that 75 points is the figure in which the market consensus is located.
His expectation is that any interest rate hike above 75 basis points might generate “strong selling” in all markets. Something that would drive assets down, including bitcoin and others cryptocurrencies. But he believes that increases below this amount “might make investors think that we are near the end of this bear market.”
“This is due to the interpretation that the market gives to how the Fed perceives the inflationary problem,” he summarizes. He explains that increases above 75 basis points would indicate that “the Federal Reserve (Fed) is going all out once morest inflation.” And, on the contrary, he estimates that “subtle” increases would indicate the possibility that inflation is giving way.
From his point of view, he visualizes that “the Fed goes all out once morest inflation”. And therefore he maintains that would expect an increase in interest rates between 75 and 100 points, driving the fall of bitcoin and other markets. In this way, the drop that they are already doing for a week following inflation announcement in United States.