- Goldman Sachs analysts have warned that BTC is at a critical point and could eventually crash to $12,000.
- Analyst says BTC could struggle to break above $25,000 till March 2023.
Goldman Sach has warned that there is a potential risk of Bitcoin (BTC) crashing as low as $12,000. Experts from the firm disclose that there is a series of macro indications that could trigger the fall of BTC. The economists working with Goldman Sachs, led by Jan Hatzius, opined that the alarming movement of the Federal Reserve benchmark rate could trigger the fall.
The implication of the FED rate on BTC price
According to the experts, the U.S Central bank will hike its Federal Reserve benchmark rate by 0.75 percent this month. Another 0.5 percent increment would follow by November. Further, the figures were above the previous predictions of 0.5 percent and 0.25 by economists.
Notably, Fed rate increment has a strong influence on predicting the movement of BTC prices in 2022. Whenever there is an increment in the Fed rate, investors usually venture into less risky investments. Therefore, compelling them to pull funds out of their BTC holdings into other “safe assets.” Investors pulled out funds from their BTC holdings when the Fed rate increased from almost Zero to about 2.25-2.5 percent.
BTC has endured a torrid period in 2022. Within the year, BTC has witnessed a fall of about 60 percent year-to-date. Now, it is rumbling at about $20,000. The fall in the price of Bitcoin triggered unrest in the entire cryptocurrency space.
This unrest caused firms in the cryptocurrency space to endure a difficult period. During that period, projects collapsed while some prominent firms cut their expenditure by laying off a part of their staff. The stormy days seem to have come to an end, but the emerging indications could trigger another unrest.
Warnings about Bitcoin investment
Due to the emerging signs, analysts are warning investors to be wary of the increasing Fed rate. A pseudonymous trader identified as Doctor Profit believes BTC price is at a bottom phase at the moment. The trader warned that there could be a price fall due to the Fed hike rate from 0.75 percent to 1 percent. Doctor Profit urged investors to be wary of the hike and consider subsequent decisions by the FED.
#Bitcoin enters the ‚Bottom‘ phase, expecting targets between $18.000 and $25.000 till March 2023. The bottom is being formed. I will keep accumulating at these prices
This is based on TA only. Please consider FEDs next decisions. 0.75 already priced in, 1bps and we see blood. pic.twitter.com/LRAgoBl6va
— Doctor Profit 🇨🇭 (@DrProfitCrypto) September 18, 2022
Meanwhile, there is another indication that points to a potential price fall for BTC. Overtly, BTC has a positive connection with the U.S stock market. Now, there is an indication from that angle regarding a potential risk.
In that regard, a strategist at Goldman Sachs, Sharon Bell, warned Investors to be careful lately. Bell disclosed that the recent activity in the stock market could be a bull trap. The strategist emphasized the warnings of Goldman Sachs that equities could fall by 26 percent. According to Goldman Sachs, the fall will emanate if the FED intensifies its efforts to battle inflation.