The crypto markets are in good shape right now as Bitcoin eyes $25,000. It is up more than 40% in 2023, and the market sentiment has also shifted from extreme fear to greed now. Overall, this is a sign that the prices are overdue to bounce back. This stands true for other assets as well, such as stocks and precious metals (Gold & Silver). However, many analysts predict that markets could turn bearish before the Fed meeting as they will not pivot and continue to raise interest rates to curb inflation on February 1st.
Will markets bleed again?
The Fed meeting on February 1st will decide how the markets behave. There is speculation from both sides. Some believe that the feds will pivot to control the impact on the economy, while many analysts believe that the interest rates will be raised again. If the former happens, the market is expected to stay bullish, and in the case of the latter, we can expect a correction.
Recently, a market strategist on Twitter called “The Carter” addressed what might happen on Feb 1. He says that Jerome Powell already knows that investors are prepared for rate cuts, so he might instead continue to increase and tighten the interest rates to curb inflation.
Powell is approaching this in 3 steps. First is the rapid rate hikes to reach a neutral stage, a little slow and measured rate hikes, and then terminal rate hikes. This topic might also be addressed according to carter, and Powell might explain how long the terminal rate must be maintained. So, yes, there could be a blood bath.
A 37% drop in S&P 500
Chris Vermeulen, the founder and CIO of The Technical Traders, recently said that he expects a 37% drop in S&P 500 from the current levels. If that happens, it will create a lot of panic in the market, and Chris says there might also be many bankruptcies. However, he does expect the price of precious metals like Gold and Silver to rise in this bear market. If this happens, we might also see Bitcoin and the crypto market rise as well; after all, we call it digital gold.
What are your thoughts as strategists say that the markets could turn bearish before Fed meeting? And do you think the feds will raise interest rates? Let us know in the comments below. And, if you found our content informative, share it with your family and friends.
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