Cryptocurrencies are preparing for further decline

As before, the dynamics of cryptocurrencies are primarily affected by the situation on the global market: investors still prefer not to get involved with risky instruments, whether cryptocurrencies or stocks. The Congressional Budget Office believes that in 2023 the American economy will grow by only 2.2%. This figure is less than the 2.6% achieved before the pandemic in 2019.

Investors are trying to calculate the Fed’s reaction to the recession looming not so far away, including they are interested in the actions of the regulator to tighten monetary policy, which is being carried out in order to combat inflation. At the moment, the market expects an increase in the interest rate by 50 basis points in June and July, and by 25 basis points in September. In fact, in this way the Fed withdraws liquidity from the market, increases the cost of debt and makes it difficult to conduct active speculation.

However, the Fed has already managed to achieve quite serious successes:

if the growth rate of food prices exceeds 8% now, then by the end of the year inflation may decrease to 4.8%, and in 2023 – to 2.8%. In other words, the need for further aggressive rate increases will disappear and the indicator may not reach the 3.5% mark, where it is expected in the market. Already, such conclusions contribute to a certain weakening of the dollar, which is actively bought in order to protect against risks, against other currencies. However, more serious reasons will be needed to start fully restoring interest in risky instruments. Moreover, the US labor market and personal consumption expenditures of Americans remain weak, which indicates the persistence of problems in the economy. In such conditions, BTC is able to fall in price to $ 24 thousand.