Note that Bitcoin and other coins have been behaving more subdued lately. Specifically, on the scale of the last week, cryptocurrency rates have changed like this.

Changes in cryptocurrency rates over the past week

However, in the context of the month, the situation still looks extremely negative. Bitcoin, Etherium and other top coins dropped by tens of percent.

Changes in cryptocurrency rates over the past month

According to analysts, the current collapse is far from the limit for the entire market.

What will happen to cryptocurrencies

Last week, the US Federal Reserve raised its benchmark lending rate by 75 basis points, the largest increase since 1994. Fed officials have not ruled out further rounds of rate hikes. This means increased pressure on asset prices, in other words markets will have an even harder time going into another round of the bull run.

Inflation in the USA

Why is this the case? The fact is that higher lending rates make it harder to borrow money. Investors get less capital to invest, so they are more cautious about the riskiest assets, which is exactly where Bitcoin comes in. In other words, the overall risk appetite of the market is becoming more subdued - so many would rather get rid of crypto than get involved with it.

Bloomberg Intelligence analyst Eric Balchunas shared his prediction for the major cryptocurrency in an exclusive interview with Decrypt. According to him, the Fed is unlikely to decide to lower the rate in the near future, although the situation in the markets may reach a critical state. Here is his rejoinder.

In every past bearish cycle there has been an idea that the Fed will step in if the markets really need support. This time they are certainly not going to do so. And the reason is inflation is a major issue in the US presidential election. Normally the Fed is concerned about market dynamics, but now there is a bigger issue. The markets will have to learn to live without the Fed, and it will be painful. It’s like getting off heroin – the first year will be tough.

In other words, the expert believes that the lack of a positive factor in the form of a lower base rate and new money supply will noticeably hamper the digital asset niche. And since no such thing is currently foreseeable, logic suggests that risky asset categories will have a tough time. However, should the trend change or the government need to print new amounts of money, the situation could change.

Bitcoin’s fall

LSJ OPS co-founder Scott Norris, on the other hand, has an accurate price target for the future – and it’s not optimistic at all. He said in an interview that Bitcoin could still fall as low as $11,000. In his opinion, the Fed’s policy should also be considered the cause. Here is the expert’s point of view.

The Fed has been extremely slow to react to inflation, even when it comes to elementary recognition. Many people have never experienced a bank crash before, and now it is primarily in cryptocurrencies and equities. Maximum market pain is coming, but it has not yet arrived. The US may miss the recession altogether and just dive headlong into an economic depression.

It should be noted that this is only a possible scenario, not the final one. Therefore one should not trust the expert's version one hundred percent - it might not happen.

Another target mentioned by analysts is $16,000 per 1 BTC. For example, this opinion is held by Julio Moreno, a senior analyst at CryptoQuant. Here’s his quote.

In March 2020, Bitcoin’s collapse didn’t last long because the Fed aggressively provided liquidity to the markets because of the pandemic. This time it is doing just the opposite.

Dynamics of the main US stock index S&P500

Either way, Fed policy is likely to be quite tight for the rest of this year. This means that a prolonged fall in both traditional assets and Bitcoin could lie ahead for the economy. According to trader and analyst Alex Krueger, it won’t be possible to talk about finally hitting bottom until the second half of the year.

It’s all about inflation and the Fed, not even crypto.

In other words, the main marker for the potential start of a new bull run will be the US Federal Reserve, experts say. Accordingly, a change in its tactics will immediately affect all markets.


We believe it is indeed logical to pay attention to the Fed's actions in this situation, because their decisions directly affect all world markets. Obviously, when the benchmark interest rate starts to decline and investors become interested in risk, crypto will be in the spotlight again. However, predicting the arrival of this moment is only sharing probabilities. Therefore, investors should be prepared for any scenario, including the most negative one.


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