Crypto Market Strategist Predicts 'Bloodbath' Ahead of Fed Meeting: February 1 in Focus

cryptonews.com:

A “bloodbath” in risk assets, including the crypto market, could become a reality as Wednesday’s important Federal Reserve (Fed) meeting moves closer, one market strategist has warned.

According to the strategist, who goes by the Twitter username The Carter, Fed Chair Jerome Powell will come out in a more forceful and hawkish way on Wednesday than the market currently expects. This, he believes, will lead to a sharp sell-off across all risk assets, which would include bitcoin (BTC) and most other digital assets.

“There will be blood on February 1. Powell will re-tighten financial conditions by forcefully addressing rate cuts head-on,” he wrote in a Twitter thread posted on Friday.

The strategist defended his view by describing Powell as “perhaps the most transparent Fed Chair in history,” while adding:

“He plays with a wide open hand. Let’s look at his ‘hand’…”

The popular analyst went on to refer to earlier statements from Powell, where he indicated that ‘overtightening’ is less of a risk for the economy than not doing enough to get inflation down to its target.

“We can support economic activity strongly if that happens,” Powell was quoted as saying with regards to the risk of overtightening.

The Fed watcher and market strategist added in the thread that both the Fed’s written statement as well as Powell’s press conference on Wednesday are likely to be “very hawkish.”

“It’s a matter of HOW Powell hammers on February 1, not IF,” he wrote, before adding some advice on what traders should look for in Powell’s press conference:

“Look for him to forcefully shift the conversation toward how long the Fed needs to hold at the terminal rate, and WHY. Look for him to expand on the lessons of the 1970s.”

The Carter further said it is