Federal Reserve Bank of Minneapolis President Neel Kashkari and Federal Reserve Bank of St. Louis President James Bullard joined other US Fed officials in considering more rate hikes, despite the catastrophic debt ceiling crisis. The debt ceiling deal could impact the BTC price as the US Treasury will issue government bonds to recover the lost balance during the banking crisis.
Inflation and a tight job market might prompt the US Federal Reserve to continue hiking rates. Fed Chair Jerome Powell’s speech last week failed to provide a clear direction. Other figures like Dallas Fed President Lorie Logan, Fed Governor Philip Jefferson, New York Fed President John Williams, Federal Reserve Board Governor Michelle Bowman agree with raising interest rates further.
St. Louis President James Bullard suggested the central bank might need to raise interest rates twice this year, noting that the Federal Open Market Committee has already aggressively raised rates to a range of 5% to 5.25%. Meanwhile, Minneapolis Fed President Neel Kashkari believes in raising interest rates over 6% to curb inflation. He claimed that even if the Fed skips the rate hike in June, it should not be considered as a pause or a pivot as inflation has not reached its target.
A close call between raising rates in June or skipping has emerged, and a recent drop from 81% to 76% in the probability of pausing the rate hike in June is observed in the CME FedWatch tool. The US dollar index (DXY) keeps moving higher, causing a rise in selling pressure on the Bitcoin price.
The BTC price has been trading sideways for a week, currently hovering around $26,800. Whales and miners are selling their BTC holdings, anticipating a drop in the price due to macro factors. Veteran trader Peter Brandt predicts that the Bitcoin price could break below the $26,800 level and fall to $24,800 before continuing its upward trajectory. He remains bullish on BTC, expecting it to reach $40,000 in the long run.
On the other hand, smart money seems more inclined to invest in Ethereum over Bitcoin, according to Bloomberg. This development could potentially indicate a shift in investor preferences and long-term performance expectations.
As market conditions are subject to change, it’s crucial for investors to conduct thorough market research before making any investment decisions in cryptocurrencies. The author and the publication hold no responsibility for any personal financial losses incurred.
Source: Coingape
