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. 

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

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. 

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. 

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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.

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.”