Analyst Nicholas Merten stated in his recent YouTube video that the global market capitalization may lose its value significantly due to the aggressive stance of the US Federal Reserve, which also leads to a liquidity crisis in the crypto space. .
Merten's recent revelations, shared in his latest YouTube video, have resonated throughout the cryptocurrency sphere. He forecasts a significant potential 43% drop in Bitcoin's value from its current level, which would lead to a substantial $440 billion reduction in the total cryptocurrency market capitalization.
Additionally, Merten sees the market reaching a state of equilibrium around the $650 billion market cap mark, with Bitcoin finding its footing within the $15,000 to $16,000 range.
At best, those who have already established their positions can expect support to emerge in the vicinity of the $650 billion market cap range, with Bitcoin potentially stabilizing in the $15,000 to $16,000 range. However, these forecasts indicate a potentially tumultuous period for cryptocurrency investors.
The liquidity squeeze by the Federal Reserve is causing waves of uncertainty in the cryptocurrency landscape.
The cryptocurrency market quickly reacted to Merten's gloomy prediction. Bitcoin, the leading industry indicator, fell below the $26,000 level in Monday morning trading. Ethereum, the second largest cryptocurrency, also fell and remained below the $1,600 mark. This bearish sentiment affected all other major digital assets, which experienced downward trends.
The recent drop in cryptocurrency The market is following the US Federal Reserve's tough policy stance, which was revealed during its September meeting. Although the Federal Reserve temporarily paused interest rate increases, it indicated an upcoming increase by the end of the year and a commitment to maintaining higher rates for a longer period than previously expected.
While the cryptocurrency market saw a slowdown, US stock futures showed resilience in early morning trading. This contrast highlights the difference in performance between digital currencies and traditional markets.
It is worth noting that the three main US stock indices concluded the previous week with losses. The cryptocurrency market is entering a period of increased volatility due to uncertainty arising from the Federal Reserve's policy decisions.
Merten's prediction serves as a reminder of how closely connected global financial markets are and how central bank policies can affect digital assets. Investors and enthusiasts are closely monitoring the situation as they prepare for possible market fluctuations.
