Bitcoin Rally Weakens as US Dollar Rises in Fed Week

A rebound in the US dollar index reflects traders’ hopes of Fed pivoting in the week’s interest-rate decision, but Bitcoin remains underbid.

Bitcoin showed an impressive performance last week as the flagship crypto surged to $21,000 last Wednesday – its highest since the end of August.

On the other hand, the US dollar came off its lows while tech stocks and bonds jumped.

Bitcoin’s Pre-Fed Retracement

Bitcoin has a tendency to rise when the dollar falls.

However, Bitcoin’s upward momentum is slowering on Monday. The world’s largest crypto asset has traced back around $20,500 as demonstrated by data from CoinMarketCap and TradingView.

The minor decline is possibly linked to the recent Tether’s news.

Bloomberg reported on Oct. 31 that Federal prosecutors are launching an investigation into the largest stablecoin project. The US watchdogs seek to explore whether the top officials at Tether committed a crime.

The News is Mixed

Negative news, which was lately proclaimed as Fud by Tether’s CTO Paolo Ardoino, has left zero to none impact on the overall market. The cryptocurrency market completed the month with $1,000 billion in total market cap.

Light has been shed on Bitcoin, Ethereum, and most altcoins. Trading and liquidity volume have increased as investors have returned cryptocurrency. The Fed’s meeting this Wednesday, however, may not favor the current bullish direction.

US core inflation continues to put great pressure on the Fed to raise the USD interest rate. Tension is growing especially after the US PCE price index revealed an increase of 6.2% compared to the previous year.

The price of Bitcoin, according to the forecasts of certain experts on cryptocurrencies, will continue to decline.

Despite the fact that recent price moves have reduced their dependency on the stock market, the correlation between the two types of assets is still extremely high.

Experts expect the Fed to pivot after its November policy meeting. Investors are advised to be cautious when pushing to buy at this time.

Meanwhile, the dollar price rose slightly following the Euro’s depreciation after the European Central Bank raised interest rates to 75 basis points as expected. This is also the anticipated interest hike for the Fed’s coming meeting.

High-profile Advocates Stay Bullish

Michael Saylor, executive chairman of MicroStrategy, firmly believes that the price of bitcoin could reach $70,000 during the next four years. The expert also projected that if Bitcoin matched gold’s market valuation, its price would climb to $500,000 within the following decade.

Matrixport’s Head of Research & Strategy, Markus Thielen, had a similar take on the price goal. The executive predicted that, “bitcoin trades around $63,160 by March 2024.” Many traders feel that the Bitcoin price is still on a roll and will continue to rise for many more sessions.

To this point, the largest cryptocurrency appears to be breaking out of a descending triangle pattern, according to veteran cryptocurrency trader Scott Redler. Meanwhile, trader Jake Wujastyk believes Bitcoin is on track to achieve the $24,000-$25,000 price range.

Many experienced investors believe Bitcoin is going to enter a new development phase, with the possibility of reaching $29,000 in the near future.

In a public statement, Robert Kiyosaki, the well-known author of “Rich Dad, Poor Dad,” suggested buying Bitcoin before the Fed pivots.

To wit,

“Gold & silver prices plunge as Fed continues raising interest rates. Silver is out of stock, so I am buying physical gold coins. Raising interest rates will kill the economy. Stock, bonds, and real estate will crash. Fed will pivot. Buy Gold, Silver & Bitcoin before FED pivot.”

Kiyosaki believes that Bitcoin can be a safe haven when the global economy crashes, and the world’s geopolitics are unstable. Bitcoin will not protect income, but it will protect wealth, the author concluded.