A popular crypto analyst says the crypto market could see a massive rally in 2023 depending on the actions of the US Federal Reserve.
In a new YouTube strategy session, the pseudonymous host of Coin Bureau tells his 2.18 million subscribers that a crypto bull rally is contingent on whether the Fed pulls back on rate hikes next year.
Guy says the Fed pausing interest rate hikes is one of the most important catalysts “that could end the bear market.”
He says that the Fed is likely to pivot even though Powell said at the last Fed meeting on December 14 that they may need to raise the rate beyond 5% to tame inflation. The Fed raised rates this month by a half point after a series of other rate hikes this year, moving the economy toward a recession. The increase brought the rate into the range of 4.25% to 4.5%, the highest in about 15 years.
“There’s no guarantee that the Fed will manage to raise interest rates all the way up to 5% or more. This is because the higher the interest rates go, the higher the likelihood that something in the financial system will break.”
However, Guy says if Fed Chair Jerome Powell does not pivot, the crypto market will implode.
“If the Fed follows through on its 2023 rate hikes, then it’s not going to be good. The crypto market will continue to crash until the Fed pauses and will only start to rally once the Fed pivots.”
If the rates are increased as forecasted, Guy says the crypto markets will continue to suffer as “money will continue to flow out of the financial system to pay back ever-more pricey debts and less money will be created due to more expensive credit costs.”
Guy says a pivot “seems more likely than not,” which would end the bear market and trigger a bull run.
“If the Fed is forced to pivot because of a problem in the financial system, then crypto will rally like crazy.”
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Featured Image: Shutterstock/Modvector/Sergey Dzyuba
