The cryptocurrency analyst il Capo of Crypto this time has mentioned the interest rate reduction process in the United States.
Capo of Crypto, a cryptocurrency analyst with a bearish trend, has shared a new analysis as the price of Bitcoin is very close to $69,000.
At the time of writing this article, the price of Bitcoin is trading at $66,582.
According to the analyst, historically, when interest rates are stopped, the market enters a distribution phase or the final stage of a price increase. When the Fed starts to cut interest rates, the market often declines. So why does this happen?
According to il Capo, high interest rates over an extended period can be detrimental to the economy. Central banks purposely maintain high interest rates during a period known as Quantitative Tightening (QT) to slow down economic activity and control inflation.
This strategy achieves its goal when inflation decreases, but it has serious side effects, such as the possibility of a recession.
Some countries like the UK and Japan have announced that they are in a recession. According to the analyst, other countries might confirm this and the market will return to reasonable prices.
However, speaking of the price of Bitcoin, the analyst notes that BTC has risen more than he expected. The analyst believes that the “continuous upward movement” cannot be sustained indefinitely.
According to Il Capo, after the rally from 16k to 60k without any major corrections, mainly due to spot ETF, FOMO halving, stablecoin minting, and liquidity gaps, everyone is optimistic and pushing it to record highs, even seeming like BTC will reach $100k or higher.
However, Il Capo believes that this is only greed and excitement.
