Elon Musk Mentions Major Threat To Bitcoin's Clambering Price As Analyst Predicts BTC Nosediving Before Surging

Elon Musk, the tech billionaire and the vocal supporter of the world's first meme coin, Dogecoin, mentioned over the weekend a major development that could impact the price of Bitcoin, the world's largest cryptocurrency by market capitalization.

The crypto market witnessed Bitcoin hitting a new two weeks low when it entered the $15,000 level last month. However, after lingering in that zone for a couple of weeks, the king of crypto climbed back to a higher price level.

At the time, the minutes of a meeting among federal officials were publicized and it revealed that "a substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate."

The minutes also showed that some of the officials understood that "slowing the pace of increase could reduce the risk of instability in the financial system."

Bitcoin's price eventually surged a few hours before Federal Reserve Chair Jerome Powell made his speech at an event hosted by the Brooking Institution on Nov. 30.

Clearly, the interest rate policy of the U.S. Federal Reserve has an impact on the price of Bitcoin.

On Friday, Chief Twit Musk shared his insight into the upcoming interest rate hike the Federal Reserve is planning to announce next week, noting that a further spike in the interest rate could "greatly" amplify the recession.

In October, Musk, who also runs the American electric vehicle maker Tesla, forecasted that the recession could continue "until spring of '24," although he noted at the time that he was "just guessing."

In another tweet, the tech billionaire said, "It sure would be nice to have one year without a horrible global event."

After Musk's tweet, Bitcoin traded up 0.23% at $17,171.96.

The Fed is seemingly approaching the late stages of a rate-hiking campaign designed to tackle inflation, which is near its highest in over four decades. Over the past months, the central bank has increased its benchmark rate several times and it is anticipated to rise a few more times before stopping.

The cryptocurrency industry has been through a lot this year and another interest rate hike from the Federal Reserve is expected to plummet the price of crypto assets, including the major ones like Bitcoin and Ethereum.

Meanwhile, a crypto analyst who goes by the name Tone Vays predicted that Bitcoin would most likely go through an adverse move before heading to a bullish cycle.
The social media influencer told his over 100,000 subscribers that the world's largest crypto asset by market capitalization might plunge 13% from its current price before witnessing an uptrend.

"I still think there is a decent probability of one more capitulation, down into sub-$15,000 range," the YouTuber said, adding, "The main reason why I believe that is because we spent way too much time at the lows of $16,000."

"The way markets bottom usually is you only get a few hours to buy the perfect low. You don't get a week to think about buying the perfect low," Vays further said.

"You either get very little amount of time to buy the perfect low, or it spends so much time at the perfect low that people don't believe it is a low. This is why I am still very concerned of one more capitulation down," he added.

Bitcoin was trading down 1.12% at $16,964.66 with a 24-hour volume of $15,463,912,250 as of 8:21 p.m. ET on Sunday, according to the latest data from CoinMarketCap.