Bitcoin crashes, US Federal Reserve slides into awkward splits

The Bitcoin price made a huge shift from Thursday to Friday night. It seems that the macroeconomic reality is really starting to push prices lower. It’s not getting any easier for the US Federal Reserve.

Is inflation sufficiently under control to lower interest rates? If not, will there not be a recession?

Difficult split for the US Federal Reserve

Despite the US Federal Reserve’s aggressive rate hikes to bring inflation under control, a recession has not yet begun. The US economy is proving particularly resilient and unemployment is currently at its lowest level in 50 years.

The problem with a strong economy is that people can continue to consume. This could lead to upward pressure on inflation. It may simply be that the Federal Reserve NEEDS a recession to bring inflation back to 2.0 percent.


For example, how about Charlie Bilello’s chart above, where we can see that real wages have increased for the third straight month? Real wages are the inflation-adjusted wages of the US population.

What does this mean for Bitcoin?

Bitcoin has struggled to regain bullish momentum of late. Despite all the good news on BlackRock’s ETF and MicroStrategy’s big buying, the bulls just couldn’t get Bitcoin price back above $30,000.

Previously, I wrote that the bulls’ inability to push bitcoin higher despite all the positive news is a bad sign for the price.

It appears that the macroeconomic reality is now slowly being reflected in the share price. Don’t forget that we just had the most aggressive interest rate campaign in Federal Reserve history.

Those calling for a soft landing (avoiding a recession) in recent weeks were a little too hasty in their conclusions. The end of 2023 could well be a difficult time for Bitcoin, while 2024 will see the sun shine again with the halving and the Spot Bitcoin ETF.

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