Capo of Crypto, a bearish cryptocurrency analyst, shared a new analysis in the minutes when the Bitcoin price was very close to the $ 69,000 level in November 2021.
At the time of writing this article, Bitcoin price is trading at $66,582.
Historically, when interest rates are paused, markets have entered a distribution phase, or the final phase of an upward rally, according to the analyst. When the Fed starts lowering interest rates, the market usually falls. So why does this happen?
According to il Capo, high interest rates over a long period of time are detrimental to the economy. Central banks deliberately maintain high interest rates in a phase known as Quantitative Tightening (QT) to slow economic activity and control inflation. This strategy achieves its goal as inflation falls, but it has serious side effects, such as a possible recession. Some countries, such as the UK and Japan, have already declared that they are in recession. According to the analyst, other countries will probably confirm this and the markets will return to their fair prices.
However, speaking about the Bitcoin price, the analyst said that BTC rose much more than he expected. However, the analyst argues that the “continuous upward movement” cannot be sustained.
After the rally from 16k to 60k without any major correction, mostly due to Spot ETFs, halving FOMO, stablecoin mints and liquidity gaps during the bear market, in Il Capo of Crypto's view, everyone is bullish and pushing the record high , it even looks like it's eyeing 100k or higher.
However, il Capo thinks this is greed and euphoria.
*This is not investment advice.
