Sirwin
Sirwin

FUD, FED & Crypto - Before & After March 2022

By idiosyncratic | Idiosyncratic Crypto | 29 Jan 2022


It seems like the long waited increases in interest rates will be the popular monetary policy for fiat currencies. Yesterday, FED declared that the interest rates will be stable for this month but the statistics from the branches of the economy will tell us whether there is a necessity for an increase in the interest rates and some other precautions.

It seems like 2022 will be the year that DXY will go up with the policies that will lead USD to become more valuable compared to the other fiat currencies (especially against the fiat money of developing countries). Seeing that it is coming, I believe both stock and crypto markets will be unsettled against Fear, Uncertainty and Doubt.

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What will Central Banks do?

I think there are not many option for central banks to choose considering that FED is expected to make 3-4 times increase in the interest rates in 2022. To be able to provide stability for the fiat currencies, they will make more or less the same amount of increases according to what FED does.

So, I, personally, expect to see either symbolic increases or some real precautions that are taken by the central banks against the growing inflation waves all around the world.

Until March 2022 - Crypto Accumulation

I'm honestly thinking that the downtrend is likely to end up within a couple of weeks that will lead us to an accumulation in majority of the cryptocurrencies. Meanwhile, neither re-test to 32k level nor denial from 42-43k levels for Bitcoin would be surprising for me.

What would be surprising before the first increase in the interest rates by FED is a crypto ecosystem that is about to blast off above strong resistance levels. IMHO, no party before March 2022.

Note: I believe that %80 of the dumps is already over. Accumulation phase would be a healthy sign for another bull run as for me.

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After March 2022 - Global Inflation & Crypto

This part will be the most exciting but also terrifying part because all the assumptions may go for nothing. Although the initial reaction of market may be negative, I think the rest of the year will bring us green days.

Initially, I rely on the global inflation that will trigger millions of people invest their money to, at least, save their purchasing power. Since it is good to see the numbers going up in bank account, it may take a bit more time to realize how dangerous inflation can be before the reflections of it in prices.

However, staying in liquid money will be the worst monetary strategy that can be applied for many people in the next months. Thus, I expect people buy lands, commodity and crypto to great extent.

Cheap Crypto; More Money

Cheap crypto, maybe it will be even cheaper. 200 Week Moving Average shows that 20-25K in Bitcoin is still possible in Q1-Q2 of 2022.

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Even if we test these levels, I expect to test previous All-time High levels quite easily. 100K Bitcoin would take altcoin market into another level when the domination starts dropping.

TL;DR

So far it looks kind of blurt to foresee the future of crypto ecosystem and the monetary policies of the central banks. Reading between the lines, many investors assume that the increase in the interest rates by FED will start in March 2022.

Before March 2022, I expect to see accumulation phase of crypto ecosystem. Meanwhile, any level that we test would not be surprising from the bearish side. However, above 42k - 43k in Bitcoin may change the whole sentiment.

I'm getting my hands ready for the next months and adjusting my portfolio accordingly. After Q2 of 2022 may be fascinating for crypto ecosystem. The waves of inflation will work best for crypto ecosystem considering the "everything bubble".

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idiosyncratic
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