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BTC struggles as FED meetings take place!

According to market capitalisation, Bitcoin is the largest cryptocurrency, and it is also experiencing a downfall in its prices. The main reason behind the price struggle of bitcoin is considered to be the upcoming United States Federal Reserve monetary policy meeting. It is about to approach soon, and therefore, it has led to the slowdown of the cryptocurrency market worldwide. Furthermore, the money printer is about to slow down its process in the coming session because of the rising inflation in the country. The United States has been facing rising inflation. Because of this, the Federal Reserve is looking forward to introducing a new monetary policy that will slow down the movement of cryptocurrencies and other kinds of funds in the country. More importantly, the new policy aims to impose high interest on the funds provided to people by banking systems that have lesser purchasing power in their hands.

The Federal Reserve meeting, which has started today, is a two-day meeting that will discuss the new policy of the United States of America. It is a financial policy that aims to reduce and increase people’s purchasing power within its geographical boundaries. The primary purpose of this meeting for the first time is to decrease the speed of asset purchases made by the country from $120 billion every month to $30 billion every month. It is a double rate of reduction from the current speed. In the eyes of some cryptocurrency traders, the policy about to come by the Federal Reserve of the United States of America will bolster bitcoins earlier. They believe that bitcoin will be used as inflation has a medium. The reversal of loose monetary policy can be a catalyst for a bearish phase in the cryptocurrency market.

The highest money providing cryptocurrency by market capitalisation, Bitcoin is struggling at 30% lower than its all-time highest price of $69,000. The beginning of December for this cryptocurrency was at the $57,000 mark, but now, it is as low as $46,600. It is a low price compared to the all-time highest price, but it is still a reasonable price if we compare it with the beginning of this year. The price at which bitcoin is standing today is 60% higher than the other financial assets, making bitcoins a safe trading option.

Reason for BTC going down!

The main reason behind the recent drop in the prices of multiple cryptocurrencies is that some enormous investors want to take the risk of the table. People believe bitcoin to be a risky asset in the market, and therefore, the decrease in its prices is linked with high volatility. Furthermore, it is in comparison with the other industrial metals and commodities, and therefore, a tighter monetary policy will decrease the attractiveness of assets like cryptocurrencies. When people have a lower amount of money in their hands, they will be less interested in preserving it by purchasing bitcoins but will look forward to using it for daily survival.

According to a market analyst, investors hesitate to buy a volatile cryptocurrency like bitcoin at the present levels on every bitcoin could make a better world . The cryptocurrencies are continuously going down and down. Therefore, most investors do not want to get stuck in a tornado. Furthermore, according to some analysts, bitcoin is expected to reach as low as a $40,000 price level, further activating the beer fees. Therefore, aggressive buyback of bitcoin may not be the ultimate solution to the decreasing prices of this most popular digital asset.

According to the CEC capital, bitcoin prices are not expected to rise in the shorter period. The pace at which the bitcoin prices are falling nowadays is very high, and therefore, the recovery is going to be slower than ever before. Earlier, bitcoin prices started to increase because of its upgrade last month. After the upgradation of bitcoin technology, the price has reached the all-time highest price, but now, the case is different. It has been closing to the price level of $40,000, and therefore, reaching the $50,000 mark will be difficult for bitcoin. Therefore, even though it is the most popular and the highest market capitalization cryptocurrency, it has experienced a downfall, and it is going to be a tough patch for it. Also, after reaching the highest price, bitcoin started to decline, and therefore, it led to a high degree of uncertainty among the investors. Due to the uncertainty, people will be less inclined to purchase bitcoins, which could be a reason for a further decrease in prices.

Red Note: 3 June 2022

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