Popular crypto analyst Nicholas Merten says Bitcoin’s (BTC) price could fall lower as long as the U.S. Federal Reserve remains hawkish.

In a new video update, the DataDash host warns his 513,000 Youtube subscribers that Bitcoin could see new bear market lows as the Federal Reserve continues to pursue tight monetary policies.

“Previously, [the Fed] was lowering interest rates and it was printing a ton of money – quantitative easing. It is now engaging in the opposite through quantitative tightening. It is jacking up interest rates at the fastest pace it has done in the past few decades since the decline of interest rates as far back as the 1980s…

And on top of that, they are starting to reduce their balance sheet. They are starting to, month by month, get into a reduction pattern of selling off US Treasuries and eventually starting to probably sell mortgage-backed securities… That’s tens, if not hundreds of millions of dollars, being evaporated from the money supply. The Fed is selling those assets in exchange for cash and that cash is being reduced. It’s coming out of the money supply.” 

Merten also says that Bitcoin will likely see more selling pressure until the Federal Reserve achieves its goal of keeping inflation under control.

“The Fed is on the right course. But it needs to take the driver’s seat on cooling inflation. And because those principles are in play here of higher interest rates and quantitative tightening through balance sheet reduction, this is the reason why Bitcoin is declining, and while it will continue to set lower highs or lower lows until the certain circumstances that the Fed is looking for that perhaps they are starting to cool down inflation that the economy is starting to slow enough where they have been able to rein in inflation back to their 2% target…. At the end of the day, that’s what the Fed is going for and until they reach those targets they will not start to pivot.”

Merten says the Fed’s current trajectory could push Bitcoin to as low as the $10,000 to $12,000 price range, but he says that is where a major opportunity for BTC bulls materializes.

“When we get that range, no one’s gonna want to buy Bitcoin. Everyone’s gonna think that crypto is going to zero. It’s over. It’s done. That’s the kind of range where I get really excited. The unexpected capitulation. That’s where you get generational buying opportunities when no one else is willing to pull the trigger, but you will.”

At time of writing, Bitcoin is trading for $19,612.


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