Bitcoin: All-Time High Is Years Away – Fed Rate Hikes Still Far From Over

Bitcoin’s sharp decline in 2022 went hand in hand with the rise in Fed interest rates. This was directly related to the cryptocurrency benefiting significantly from fresh capital flowing into BTC/USD with the Corona Pandemic stimulus measures.

However, by the end of 2021, the Fed had to realize that the rise in inflation, which was initially considered temporary, was proving to be stubborn. Thus, the central bank was forced to take up the fight against rising prices and withdraw liquidity from the market via higher interest rates – liquidity that speculators lacked, causing the markets to plummet.

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The recent rally in the markets was driven by the idea that the Fed’s rate hikes will soon be over and a new phase of monetary easing is imminent

Bitcoin critic Peter Schiff, on the other hand, points out that the U.S. central bank has battled high inflation before and it took twelve years to bring it down to two percent. This was accompanied by interest rates reaching 16.2 percent in 1986.

Given this, the expert is convinced that the markets still have a long road of rate hikes ahead of them before the hoped-for Fed pivot occurs.

However, the Fed won’t be able to crack down as hard as it did then because that would trigger a financial crisis worse than 2008, Schiff explains. So a period of low-interest rates with low inflation, is a long way off, which is why the next all-time BTC high is unlikely in the short term.

Bitcoin technical price levels

Bitcoin is currently down -0.29 percent at a BTC/USD rate of $24,516, while on a weekly basis, it is up 11.83 percent.

The cryptocurrency initiated a downward correction after forming a new high at $25,233 on February 16. In the process, the supports of the 23.6 percent Fibo retracement and the 38.2 percent Fibo retracement were briefly breached.

Bitcoin (BTC/USD) 4-hour chart

Trading on February 20th is already taking place back above the 23.6 percent Fibo retracement of $24,332 and so a test of the recent high of $25,233 can be expected. A daily close above this level would increase the scope for extending gains toward the 123.6 percent Fibo expansion of $26,133.

However, if the bulls fail to sustainably defend the 23.6 percent Fibo retracement, the 38.2 percent Fibo retracement of $23,775 and the 50 percent Fibo retracement of $23,325 will come into focus.

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(Featured image by petre_barlea via Pixabay)

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