A much-anticipated interest rate cut by the United States Federal Reserve may not be the boon for Bitcoin many expect, according to analysts. Contrary to popular belief, such a move could drive Bitcoin’s price significantly lower, potentially to its lowest since February.
Analysts from Bitfinex have voiced concerns, stating, “If we were to speculate, we would caution to expect a 15-20 percent decline when rates are cut this month, with a bottom of $40-50k for BTC.” They highlighted that September traditionally brings volatility to Bitcoin’s value, and with the upcoming Fed decision, this could intensify market fluctuations.
The note from Bitfinex pointed out that any changes in macroeconomic conditions could quickly invalidate their predictions, adding to the uncertainty traders currently face. The Federal Reserve’s rate decision is due on September 18, buoyed by expectations of a cut following dovish remarks from Fed Chair Jerome Powell in August, who noted that “the time has come.”
Bitcoin’s appeal often increases when interest rates drop, as traditional investment options like bonds offer lower returns. However, Bitcoin was trading down at $57,754, having lost 2.67% in value over the last week, according to CoinMarketCap.
A potential 20% decrease from its current price could see Bitcoin falling to around $46,000, a price last seen on February 8. Markus Thielen, head of research at 10x Research, suggests that reaching this price level could be critical for kickstarting the next bull market. Thielen recommends targeting the low $40,000s to optimally enter the next bull cycle.
Further insights from the crypto community include a note from Joe Consorti, an analyst at The Bitcoin Layer, on a social media platform X: “$60,000 is no longer a blow-off top level dominated by speculators, it is a consolidation zone where long-term, mature holders accumulate and HODL.”
Crypto trader Daan Crypto Trades also commented on Bitcoin’s stability, noting it is “still fighting around its Bull Market Support Band,” indicating a reluctance to deviate significantly in either direction.
