Elon Musk and Cathie Wood sound the 'deflation' alarm - is Bitcoin at risk of falling below $14,000?
Bitcoin price could resume its downtrend if the Fed continues to hike rates on the prospect of a rising jobless rate .
Market analysis
Bitcoin (BTC) has rebounded 20% to nearly $22,500 since September 7. But the risks of bullish traps abound in the longer term as Elon Musk and Cathie Wood sound the alarm over a possible deflation crisis.
Cathie Wood: "Deflation in sight"Tesla's CEO tweeted over the weekend that a major interest rate hike from the Federal Reserve could increase the risk of deflation. In other words, Musk suggests that the demand for goods and services will fall in the United States in the face of rising unemployment.
Major Fed rate hike risks deflation
— Elon Musk (@elonmusk) September 9, 2022Generally, rate hikes have been bad for Bitcoin this year. In context, the period in which the Fed raised its benchmark rates from near zero in March 2022 to 2.25% to 2.50% in August 2022 coincided with a drop in the price of BTC of more than 50% .
So far, the labor sector has been very resilient. Nevertheless, the latest report from the Bureau of Labor Statistics shows that the unemployment rate rose to 3.7% from 3.5% in August. Even Alphabet (Google) has warned that they may soon resort to layoffs to stay 20% more efficient.
[embedded content]But Fed Chairman Jerome Powell said the central bank could
Bitcoin price could resume its downtrend if the Fed continues to hike rates on the prospect of a rising jobless rate .
Market analysis
Bitcoin (BTC) has rebounded 20% to nearly $22,500 since September 7. But the risks of bullish traps abound in the longer term as Elon Musk and Cathie Wood sound the alarm over a possible deflation crisis.
Cathie Wood: "Deflation in sight"Tesla's CEO tweeted over the weekend that a major interest rate hike from the Federal Reserve could increase the risk of deflation. In other words, Musk suggests that the demand for goods and services will fall in the United States in the face of rising unemployment.
Major Fed rate hike risks deflation
— Elon Musk (@elonmusk) September 9, 2022Generally, rate hikes have been bad for Bitcoin this year. In context, the period in which the Fed raised its benchmark rates from near zero in March 2022 to 2.25% to 2.50% in August 2022 coincided with a drop in the price of BTC of more than 50% .
So far, the labor sector has been very resilient. Nevertheless, the latest report from the Bureau of Labor Statistics shows that the unemployment rate rose to 3.7% from 3.5% in August. Even Alphabet (Google) has warned that they may soon resort to layoffs to stay 20% more efficient.
[embedded content]But Fed Chairman Jerome Powell said the central bank could
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