The bankruptcy of FTX, a $32 billion crypto exchange, has shaken investor trust in cryptocurrencies. Market participants are constantly attempting to assess the degree of the harm done and its effect on business in the coming years. In one of the greatest crashes ever, the prices of all major cryptocurrencies plunged immediately after FTX filed for bankruptcy.
However, it appears as if the tide has begun to turn since the beginning of 2023. The top players are rallying major assets. However, the influence of the most recent federal meeting increase in interest rates may be seen in a loss of gains across markets.
As a result of the recent Fed meeting, the cost of capital for companies is increasing, lending conditions for consumers are undoubtedly tighter, and there is still ambiguity about the level at which the Fed will pause its rate hikes to try to moderate inflation.
The Upcoming Fed Meet
Equities, precious metals, and cryptocurrencies have been on a tear in the final three weeks of 2023, and all eyes are now on the next Federal Open Market Committee (FOMC) meeting, which is taking place on January 31st and February 1st.
Governor of the Federal Reserve Christopher Waller stated on Friday that he supports raising the benchmark interest rate by a quarter point at the upcoming FOMC meeting. Analysts predict that the conclusion of the forthcoming Fed meeting will have an impact on the market’s present trajectory.
On Jan. 27, a market expert known as “The Carter” stated that “there will be blood on February 1,” referring to the market upheaval that may occur when Powell addresses the country. While some investors anticipate a dovish Fed and rate reduction, Carter believes Powell will continue to tighten and adopt restrictive policies.
The analyst points out that Powell previously discussed a “broader tightening project” in three stages: rapid hikes to reach a neutral rate, gradual hikes to reach a “sufficiently restrictive” rate, and staying at the terminal rate for a while.
Vermeulen’s Prediction
Chris Vermeulen, CEO and Founder of The Technical Traders, analyses the most recent surge. He explains that he expects gold, silver, and miners to reach a major bottom in the first half of 2023, but adds that this will be followed by a multi-year rally.
While metals may hold up till the end of the year, he still expects a “big top” in the stock market and a corresponding surge in the US dollar.
Source: Read Full Article