Bitcoin (BTC) set to fall below $20K this week on Fed’s 0.75% rate hike FUD

YEREVAN (CoinChapter.com) — Bitcoin (BTC) could see its price fall below the $20,000 mark. The speculation comes amid a possible 0.75% Fed fee rate hike this week.

Meanwhile, the crash of Terra’s LUNA and its stablecoin UST has accelerated the market dip. Moreover, the recent decision by the Celcius network to suspend withdrawals has added to the bearish sentiments. 

Recommended: MicroStrategy (MSTR) margin call around the corner; Bitcoin (BTC) falls to $23K – what’s next?

Analyst Michael Van de Poppe, the chief executive of investment consultancy Eight Global, expects Bitcoin (BTC) to fall to or under $20,000. 

Higher timeframe two interesting regions for $BTC;

Region around $23,500 (OB there) -> could potentially wick towards 200-Week MA around $22,500.

Second region is the previous ATH around $19,000.

Possibly less heavy FED hikes on Wednesday could result into heavy bounce. pic.twitter.com/9g87AKlIvE

— Michaël van de Poppe (@CryptoMichNL) June 13, 2022

Fed’s fee hike a challenge

As Bitcoin (BTC) struggles to recover, market watchers give hawkish predictions from the upcoming two-day meeting of the Federal Reserve. 

The Labor Department reported Friday that the consumer price index (CPI) rose 8.6% in May. Wall Street giants, including Barclays and Jefferies, said they expect the Fed to raise rates by 0.75%.

JP Morgan’s chief economist Michael Feroli also made similar predictions. 

Later On The Day Markets Finally Priced In A 0.75% Hike From The FED. But JPM Thinks 1% Is Coming. JPMorgan Now Sees Fed Hiking 75bps On Wednesday, Sees "Risk" Of 100bps. https://t.co/zNWz9zs9Jm pic.twitter.com/Lw74lP4Cri

— Crush The Market (@crushthemarket) June 13, 2022

On Monday, Wall Street Journal’s Nick Timiraos amplified the speculations in his report. 

“A string of troubling inflation reports in recent days is likely to lead Federal Reserve officials to consider surprising markets with a larger-than-expected 0.75-percentage-point interest-rate increase at their meeting this week,”

he wrote. 

As seen before, a fee hike by the Fed usually hurts Bitcoin’s price. When the Federal Reserve increases the interest rate, the leading cryptocurrency’s price falls. It can be said that fee hikes and BTC prices are inversely related. 

Recommended: Bitcoin (BTC) price plunges below $25K following headwinds from growing inflation — what’s ahead?

Meanwhile, Poppe is not the only one who sees Bitcoin prices tumbling. Long-time crypto skeptic Peter Schiff has made a similar prediction. The famous gold evangelist also sees Ethereum (ETH) falling to $1,000 per token. It currently trades at $1164.

This could be a rough weekend for #crypto. #Bitcoin looks poised to crash to $20K and #Ethereum to $1K. If so, the entire market cap of nearly 20K digital tokens would sink below $800 billion, from nearly $3 trillion at its peak. Don't buy this dip. You'll lose a lot more money.

— Peter Schiff (@PeterSchiff) June 11, 2022

Bitcoin (BTC) price falls below $21K 

The price of Bitcoin (BTC) continues to struggle nearly 70% below its all-time high of $68,789 from last November. The largest crypto by market cap has shed over 35% in the past week alone. 

On Tuesday, BTC extended its losses, falling below the $21,000 mark to touch $20,950 before making a slight recovery. While writing, a single Bitcoin exchanged hands for $21,872, according to data on CoinMarketCap.

At the backdrop of the FUD created by the Fed fee hike speculations, Bitcoin’s worries are far from over. However, as Van de Poppe points out, “less heavy FED hikes on Wednesday could result in a heavy bounce.”