Bitwise warns: Bitcoin may face a "painful decline" in the next few weeks, but it is also a good opportunity to buy the dips

The US Federal Reserve (Fed) announced on the 20th that "the rate cut will be reduced next year" after Chairman Powell's announcement, and Bitcoin and the cryptocurrency market began to show a downward trend. Bitcoin has fallen from the high of $102,800 on the 20th, with the lowest reaching $92,232, a drop of 10.3%. Although Bitcoin rebounded and tried to regain the $100,000 level over the weekend, it still could not resist the downward pressure of the market and is currently trading at $95,222. Bitwise: Further declines are likely in the coming weeks According to a report by Coindesk, Andre Dragosch, Head of European Research at asset management firm Bitwise, said this risk-off sentiment could last for some time: Overall, the Fed is currently in a dilemma, as despite three consecutive rate cuts since September, financial conditions continue to tighten. At the same time, according to the Truflation US inflation indicator, real-time inflation measurement has accelerated to new highs in recent months. Dragosch added that Bitcoin may see further declines in the coming weeks, but this could also be a good opportunity to 'buy the dips': Therefore, we are likely to see more painful declines in the coming weeks, but given the continued tailwinds from the limited BTC supply, this could be an interesting buying opportunity. Additionally, according to a report by Cointelegraph, Bitwise's Chief Investment Officer Matt Hougan said the recent crypto market correction may be due to "the natural deleveraging of leverage", and emphasized that the long-term fundamental factors remain strong, with the crypto market still in a strong bull market. Is the 1970s inflation pattern about to play out? On the other hand, some may have heard that the current price pressures in the US economy are similar to the inflation pattern of the 1970s, when the second wave of inflation was more severe than the first. Dragosch pointed out that the persistently high inflation rates in recent months have made the Fed cautious about rate cut decisions: They may be afraid of a double-peak scenario and a resurgence of double-peak inflation from the 1970s, which is why they are not too willing to cut rates aggressively. If they cut rates sharply, they will face the risk of a sharp acceleration in inflation, and if they take no action, the economy may be affected.