Bitcoin Down 45% Since Fed Made the First Rate Cut & Launched QE
- Bitcoin today crashes to $6,515 level
- Quantitative easing is rocket fuel for Bitcoin, Doesn’t look like it
- “Only narrative still standing is the halving/s2f,” – economist Alex Kruger
- Today, Bitcoin price continued its descent
Bears’ chokehold on Bitcoin is only getting tighter as today we dropped to $6,515 level on Bitstamp, continuing the tradition of slow Mondays.
At the time of writing, BTC/USD has been trading at $6,850 as per Coincodex, while managing the daily trading volume of just above $658 million. Following BTC, altcoins are currently behaving even worse.
Crypto market performance in the past 7 days, Source: Coin360
Last Monday, we were trading around $8,500 level and this Monday we have fallen to nearly $6,500 level that has the leading cryptocurrency losing 23.5% of its value.
This month that has been expected to take Bitcoin to 2019 high to $14,000 because historically it has been the best month of the year, has ended up recording the longest red candle of 2019 and since its drop from $6,500 to below $3,200 in November 2018.
Btc is at monthly support. Bulls want a monthly candle close above the 21EMA. Bears want Bulls to capitulate pushing price to the next support at 5500s. pic.twitter.com/uYJWs20JVB
— CryptoWolf (@IamCryptoWolf) November 25, 2019
Quantitative easing is rocket fuel for Bitcoin, Doesn’t look like it
Interestingly, since Bitcoin experienced its first-rate cut, it has crashed over 45%. In August, the Federal Reserve made the first rate cut since the recession of 2008 that led to the creation of Bitcoin.
It was the fifth-rate cut in 25 years that had the stock market soaring but Bitcoin at that time was unaffected.
Commentators called it a bullish event for Bitcoin. One such bull was Fundstrat’s Tom Lee who said a weaker US dollar would push the prices of stock and bitcoin up. Though the three major stock benchmark indices have been making new highs in 2019, Bitcoin has only moved downward since the Q3 of 2019.
However, economist and order Alex Kruger had shared his skepticism as Bitcoin never reacted to an FOMC decision further commenting, “Many crypto traders now live in an imaginary alternative reality.”
This time as well, Kruger took to twitter to point “how the Fed “printing money” was supposed to make bitcoin prices explode higher” and quantitative easing has been supposed to be the rocket fuel but Bitcoin is actually down 45% since the Fed started expanding its balance sheet in August.
Remember how the Fed "printing money" was supposed to make bitcoin prices explode higher?
Quantitative easing is rocket fuel!
— Alex Krüger (@krugermacro) November 24, 2019
Following the 2008 economic crisis, the US Fed decided to follow the QE policy where the central banks purchase government and other securities from the market to increase the money supply and encourage lending and investment.
Kruger yet again noted that though added liquidity can help the price, Bitcoin does not respond to macro variables.
Bitcoin market, he says is an illiquid and fragmented market that in the absence of a mass influx of new buyers is impacted by the actions of few. Kruger said,
“Only narrative still standing is the halving/s2f. This, by the way, is not something bad. It just is what it is. We take it or leave it,”
“I take it.”
The rocket fuel for Bitcoin not working as supposed to be.