Altcoin Sherpa, a famous analyst, expressed his views regarding the native token of Lido DAO (LDO) to his 182,400 Twitter followers. He said that the token could fall by 64% from its current price.
Following his footsteps, the host of the popular YouTube channel Coin Bureau, Guy, a pseudonymous analyst, also warned his 2.1 million YouTube subscribers regarding an increase in the rate of interest and the major impact it could have on the crypto asset prices due to the recent actions of the Federal Reserve
According to the reports, the Federal Reserve will hasten up the selling of US Treasuries and mortgage-backed securities along with other assets. If the prices are lower, it will definitely lead to higher interest rates.
A Major Hit Incoming?
As the Federal Reserve is keen to sell these assets which are worth billions of dollars, the market can be further hit as there aren’t enough buyers to handle this shock and as a result, the prices will fall to a large extent.
As a result, the rate of interest will rise which the investors will not be able to absorb and this will cause a major market plunge. This also happened in 2018 when the Federal Reserve started selling off assets on its balance sheet. As a result, the S&P 500 index came to 2,940 points and lost 20% of its value.
The Coin Bureau host expresses his fear that a repeating pattern of history could spell out trouble for digital assets.
“Given that cryptocurrency is highly correlated to the stock market with more volatility, this could translate to a 40% drop for the largest coins and tokens, with 60% or even 80% drops for most medium and small-cap altcoins with the absolute bottom being sometime early next year.”
BTC to Remain Relatively Unimpacted
According to the Coin Bureau host, the price of Bitcoins will not be impacted and BTC will experience the least losses as compared to other Altcoins.
However:
“Even then, the losses could still be more than most crypto holders can stomach.”
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Source: https://coinpedia.org/altcoin/altcoins-might-drop-nearly-80-if-history-repeats-coin-bureau-outlines-the-timeline/