Fed threatens rate hikes, crypto takes a hit — short Bitcoin breakdown
Thesis
When the Federal Reserve threatens to raise interest rates, investors tend to pull their money out of highly speculative assets like cryptocurrencies because safe government bonds suddenly start paying higher, guaranteed returns. This shift away from risk is dragging Bitcoin down, and fears over the unraveling of a major crypto investment firm's funding model are adding extra panic to the market. With rate hike bets surging and spot crypto ETFs seeing massive outflows, the selling pressure on Bitcoin is likely to continue in the short term.
Strategy approach
Build a rule-based strategy that enters short BTCUSDT on the 4-hour timeframe when the price closes below the 50-period simple moving average and RSI(14) crosses below 50. Exit the trade if RSI crosses back above 55 or if a 4% stop loss is hit. Max hold of 14 days.