Bitcoin Price Threatens $19.6K as Ray Dalio Predicts 30% Stock Crash


Bitcoin (BTC) attempted to break local lows on Sept. 16 as the latest cross-crypto downtrend intensified.

BTC/USD 1-hour candlestick chart (bit stamp). Source: TradingView

No relief for BTC bulls after Merge

Data from TBEN Markets Pro and TradingView showed that BTC/USD was approaching $19,600 at the time of writing, with buyer support just avoiding a further decline.

The level had remained in place as an intraday floor as the Ethereum merger ended, only to trigger a sell-off, pushing Ether (ETH)/BTC to a three-week low.

ETH/BTC 1-day candlestick chart (Binance). Source: TradingView

Amid the gloomy mood, traders and analysts showed little inclination to revise their market outlook.

“I am confident in the scenario of fast pump to 23k on BTC and 1800 on ETH and big dump from there”, Crypto’s Il Capo wroterepeating a long-held theory:

“Time will tell.”

Warning that the situation “doesn’t look good” as the popular CryptoBullet account demanded a recovery of the 100-period moving average (MA) to turn bullish on the 4-hour chart.

Fed rate hikes will push stocks down – Dalio

Meanwhile, after another day of losses in US equities, investor Ray Dalio drew some new bearish conclusions about what the current inflationary environment would mean for the markets.

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In his latest blog post, published Sept. 13, Dalio predicted that the combined damage to stocks would cost them 30% of their current valuation.

“The rise in interest rates will have two kinds of negative effects on asset prices: 1) the present value discount rate and 2) the decline in incomes produced by assets due to the weaker economy. We need to look at both,” he explained:

“What are your estimates for this? I estimate that an increase in interest rates from where they are to about 4.5 percent will have a negative effect of about 20 percent on stock prices (on average, although greater for longer-term assets and less for shorter-term assets) based on the present value discount effect and about a 10 percent negative effect of declining incomes.”

That would threaten highly correlated crypto markets, with Bitcoin thus targeting levels closer to $10,000.

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As TBEN reported, that number is currently no stranger to the radar of long-term forecasters.

The Federal Reserve is being tipped to implement a further 75 basis point rate hike at the Federal Open Markets Committee (FOMC) meeting next week, with some market participants expecting as much as 100 basis points, according to data from the CME FedWatch Tool.

Table of probability percentages from the Fed. Source: CME Group

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move carries risks, you should do your own research when making a decision.

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