🚨URGENT: Bitcoin Crash INCOMING? (Fed Rate Hike TOMORROW)

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Federal Reserve interest rate hikes are likely. Tomorrow, the Federal Reserve and the FOMC are going down, and we have to take a look at what Bitcoin price action is likely to be like. Should we see an interest rate hike? Something that we haven't seen since 2023 And Bitcoin is standing on the edge of a cliff with a lot of people looking for that massive crash, at least down to the $60,000 region locally at the Golden Pocket. Here at $74,000 is still a position that has not been retested on Bitcoin. Just looking locally within this range, that Golden Pocket sits at around $73,000.

In a broader context, though, the point of control for this entire range that Bitcoin is sitting at right now is at the high $60,000, $67,000 to be exact. And these levels, though they were tried and tested down here in the $62,000 region, we blasted through both of these levels in an absolute up only feeling a few weeks ago, and now the party seems to be getting slower, and the money flow is getting lower. So I'm going to answer the question on everybody's mind. Is an interest rate hike likely to push Bitcoin down to those dreamy levels of $40,000, maybe even $30,000 with a major unwind? I have some data to show you exactly what Bitcoin did the last time we saw rate hikes during a bear market, because there was no rate hikes during the last bull market or the bull market previous to that. Now, I will say this. Tomorrow, the Federal Reserve rate decision is going to bring fireworks from the orange one. Donald Trump is going to freak out as Kevin Warsh is slated to raise the interest rate with a 90% likelihood he's going to hike those rates. And as it sits, the Fed CME tool looks at a 92% likelihood of a 25-base point increase, and the Polymarket coming in very strong at an 88% likelihood on that same increase.

And the driving factor for raising rates in this environment, inflation is roaring back. Oil has surged above $105 a barrel. We have pressures on the bond market as well. China's share of US Treasuries went from 14% to 2%, and in that same timeframe, our debt went from $6 trillion to $40 trillion. We have less demand on our fiat currency and 7 times the debt. This is a great post from Quentin Francois. Shout out to you.

This inverse set of data has larger investors terrified. So now we know why they have to raise interest rates. And honestly, raising interest rates in this environment is the responsible thing to do for the Federal Reserve Chair. But what does it mean for Bitcoin? What does it mean for my banks? Well, let's take a look. The last time we saw an interest rate hike was July 26th of 2023

On the Bitcoin chart, that is this moment right here. We had also seen interest rate hikes all the way through the entirety of the lows of the bear market of 2022 Now, these rate hikes started off hot and heavy. The first rate hike that we saw during that bear market was September 21st of 22, where they raised it by 75 base points. Over the course of the next few weeks, Bitcoin decided to pump by a modest amount, running around 8-9%, and then ran into the wonderful moment where Sandbank been freed and FTX collapsed, pushing us down to the 15k region. Incidentally, the day that that went down was the next Federal Reserve interest rate hike at 75 base points as well. Now, a few months later, December 14th, they decided to pull back the interest rate increases down to 50 base points, right here, December 14th. Two weeks from December 14th, we're down by a slight amount, 7%.

February 1st comes along, another Federal Reserve interest rate hike, but this entire region of later interest rate hikes, these last four, were all 25 base points, not the hammers that were dropped here at 50 base points, 75 base points, and 75

So they raised interest rates on Bitcoin at its darkest hour, and yet Bitcoin decides to grind a bear market floor, a swooping pattern, and move back into bull market territory regardless. And if you look at the average return on Bitcoin over the course of the next 14 days, once these occurrences happened, you're looking at about a 2% drawdown, but that is including this FTX crush, which is very, very notable, a systemic break in something major within crypto helps bring that median into the negative territory. Without something structurally breaking, honestly, this stays pretty flat. In general, 4 out of the 7 times we saw these rate hikes in the last bear market, we ended up going up. To put it bluntly, Bitcoin does not hot react in a macro way to these interest rate hikes from the historical data we have. The real pain is if you are leverage trading on FOMC days. These days usually end up playing out with massive, massive volatility when we do see either a raise or a cut on the interest rates. And the psy-op here is that for years, you've heard this talking heads, really don't know what the hell they're talking about, saying that Federal Reserve interest rate cuts are going to send us to the moon and interest rate hikes are going to send us back down to hell. That is simply not true. I'm going to show you exactly why I'm saying that. I've covered all the past hikes that Bitcoin has faced, and incidentally, that was at a similar bear market low. One of the most maddening things that I hear is that cutting interest rates is going to send us to Valhalla, because the data behind interest rate cuts is extremely mixed and honestly kind of angles towards the downside if you're looking at it for the most recent past. Bitcoin had many interest rate cuts in the last bull market. Now, if I was a betting man, I would say that more often than not, this is simply just a noise for Bitcoin. The real thing to listen to is the Federal Reserve and the Treasury, their balance sheets. If they're expanding and quantitative easing in any form is coming into the market, that's where risk assets go ballistic. Now, interest rate cuts, sure. They're band-aids for the traditional banking system to make things feel a little bit easier, cheaper money, but that doesn't play directly into the Bitcoin chart. These two interest rate cuts were leading into Trump, the pro crypto president, taking office on the November 2024 time frame. And these three interest rate cuts at the recent peak of Bitcoin came at the absolute worst time for price action as we were playing out the remainder of our four-year cycle time frame. What I think people are still holding on to is remembering what happened to crypto in the interest rate cuts of COVID and the late 2019, July 2019 time frames. We saw interest rate cuts happen in the middle of 2019 that really didn't do anything amazing for Bitcoin. It was just a slope downhill move, slight run up, then we run into a world economy shutting down. The real alpha between all of these data points is that our current scenario and the setup for Bitcoin and how it looks right now looks eerily similar to this bottoming structure that we had back in 2022 Regardless of the interest rate hikes or cuts or whatever you want to call it, generally speaking, Bitcoin is slated to push back up, finding reasons to look for that $40,000 place to enter Bitcoin at this point in the game is hoping on a possibility and not a probability. The probability, in my opinion, over the next few weeks is CHOP, unexciting, grueling CHOP that very well could go vibe-check the center point of this recent W pattern, some of those volume nodes that I was showing you earlier on the charts, and really looking out for that low $70,000 mark to be tested, be it between $72,000 to $74,000. The charts are showing me that there is a slight pullback in stores. Money flow is angling to the downside on the weekly. The daily doesn't look great either. So my Bitcoin plan for the rest of the week and the altcoin plan let some of the news flush itself out. We see the Clarity Act votes happening today. Total mass probably not going to happen. If it does, great.