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Breaking News: Cantor Fitzgerald Projects Major Growth For Hyperliquid (HYPE) In Explosive New Report

What This Gold Pattern Could Hint For Bitcoin If FED Hikes Rates

Reynaldo Marquez
Reynaldo Marquez
Last Updated: June 11, 2024 2:18 pm
2 mins read
Bitcoin

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Bitcoin trades north of the $40,000 price mark with bullish momentum in the last 24 hours. Today, the U.S. Federal Reserve (FED) is expected to begin its monetary tightening policy.

Related Reading | TA: Bitcoin Breaks $40K, Key Upside Break Suggests Trend Change

The financial institution could raise interest rates hikes, and slowly pull liquidity from global markets. Bitcoin and risk-on assets, such as equities, are expected to turn bearish. So far, BTC’s price has failed to meet expectations.

At the time of writing, Bitcoin trades at $40,416 with a 4% profit on the last day.

Bitcoin BTC BTCUSD
BTC with bullish momentum on the daily chart. Source: BTCUSD Tradingview

Bitcoin has been behaving on its own with resilience to a potential shift in the U.S. dollar monetary policy. In step of trading as a stock, BTC’s price seems more akin to Gold’s (XAU) price action.

The precious metal recently broke above the $2,000 but has backtracked on some of its gains. This downtrend could be short-lived and could predict what’s coming for Gold and Bitcoin. Two different assets are sometimes traded under the inflation hedge narrative.

Senior Commodity Strategist for Bloomberg Intelligence Mike McGlone indicated that the FED last increased interest rates to 25 bps or 0.25% in 2015. Gold was coming from a multi-year downtrend that began in 2011.

The precious metal saw appreciation posts the 2008 global economic crisis, but as markets began to recover, investors begin reducing their gold positions. As seen below, 2015 was the last time during the past decade that Gold’s price saw a low at around $1,000.

Bitcoin BTC BTCUSD
Source: Mike McGlone via Twitter

Gold began an upward movement, as McGlone noted, the “next day” after the FED announced the beginning of a new tightening cycle. The current inflationary environment, with the risk of an extended war in Europe, could fuel a fresh Gold rally and Bitcoin could follow.

Bitcoin On A Tightening Cycle

At least, Bitcoin could continue to disappoint traders waiting for the low $20,000. The cryptocurrency, according to the pessimistic traders, has been appreciating a favorable environment since 2020.

However, the XAU/BTC chart shows Bitcoin has been appreciating for the past decade despite the FED’s monetary policy, or because of it.

Bitcoin BTC BTCUSD
Gold/BTC trending to the downside on the daily chart. Source: XAUBTC Tradingview

The short-term reaction to the FED announcement could hint at what BTC’s price will do in the coming months. As NewsBTC has been reporting, cryptocurrencies could appreciate if the financial institution hints at a less aggressive monetary policy.

Related Reading | Bitcoin Value Takes A Hit As U.S Inflation Rises

According to the analyst TedTalksMacro via Twitter:

Fed hikes by 25bps today, risk assets (BTC, equities) higher on the news. Powell indicates at the press conference that more hikes to come (4-5 by EOY) – how the market moves during/after the press conference to be decided by whether it’s a dovish or hawkish hike Dovish hike will be signaled by any mention of caution during the press conference. A hawkish hike will be signaled by any intention to continue hiking rates/tightening despite negative impacts on economic growth!

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Reynaldo Marquez
Reynaldo Marquez

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Created by industry experts and meticulously reviewed
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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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