After the Fed announced that it plans to reduce the rate cuts next year, Bitcoin and the cryptocurrency market began to show a downward trend, and there are currently no signs of a rebound. In response, Bitwise's European research director, Andre Dragosch, stated that Bitcoin may see further declines in the coming weeks. (Background: Bitcoin technical indicators are bullish: The VIX fear index suggests a bottom, and Fibonacci forecasts a breakthrough of $160,000 in February next year) (Background context: Bitcoin plunges by $96,000, 300,000 people liquidated a billion dollars! Analyst: The Fed's slowdown in rate cuts does not change the upward trend of BTC) On the 20th, after Fed Chairman Powell announced, "It is expected to reduce the rate cuts next year," Bitcoin and the cryptocurrency market began to show a downward trend. Bitcoin fell from a high of $102,800 on the 20th, reaching a low of $92,232, a decline of 10.3%. Although Bitcoin rebounded over the weekend, attempting to regain the $100,000 mark, it still could not withstand the downward pressure from the market, currently reported at $95,222. Bitwise: Further declines may occur in the coming weeks. According to Coindesk, Bitwise's European research director, Andre Dragosch, indicated that this risk-averse sentiment may persist for a while: Overall, the Fed is currently in a dilemma; although it has cut rates three times since September, financial conditions continue to tighten. Meanwhile, according to Truflation's U.S. inflation indicators, real-time inflation measurements have accelerated to new highs in recent months. Dragosch added that Bitcoin may see further declines in the coming weeks, but this could also be a good opportunity to buy the dip: Therefore, it is likely that we will see more painful declines in the coming weeks, but given the continued positive outlook provided by the insufficient supply of BTC, this could be an interesting buying opportunity. Additionally, according to Cointelegraph, Bitwise's chief investment officer, Matt Hougan, stated that the recent pullback in the cryptocurrency market may be due to "natural liquidation of leverage," emphasizing that long-term structural factors remain strong, and the cryptocurrency market is still in a robust bull market. Is the inflation pattern of the 1970s about to unfold? On the other hand, some may have heard that the current price pressures in the U.S. economy resemble the inflation patterns of the 1970s, during which the second wave of inflation was more severe than the first. Dragosch pointed out that the persistently high inflation rates in recent months have caused the Fed to worry about the possibility of a second wave of inflation, leading to a more cautious approach to rate cuts: They may fear a double peak scenario and a resurgence of the 1970s double peak inflation, which is why they are less willing to aggressively cut rates. If they cut rates significantly, they will face the risk of sharply accelerating inflation; if they take no action, the economy may be affected. The Fed is scared of this scenario, which is why Powell will probably do too little/too late… Expect more pain over the coming weeks. pic.twitter.com/pi9dsMIUMU — André Dragosch, PhD | Bitcoin & Macro (@Andre_Dragosch) December 20, 2024 Related reports: Ignoring IMF restrictions, El Salvador unusually added 11 BTC this morning, will the Bitcoin purchasing plan accelerate? Quick news: The Bank of Japan maintains the interest rate at 0.25%, Bitcoin regains the $100,000 mark. U.S. ten-year Treasury yields break through 4.5%! New bond king: Trump will not buy Bitcoin before taking office. "Bitwise warns: Bitcoin may face 'painful declines' in the coming weeks, but it is also a good opportunity to buy the dip" This article was first published on BlockTempo (the most influential blockchain news media).

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