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Bitfinex warns that a U.S. Federal Reserve rate cut could unexpectedly push Bitcoin’s price down, contrary to market hopes for a boost. In a Sept. 2 note, analysts speculated that Bitcoin could drop 15-20% if the Fed cuts rates, with a potential bottom of $40,000 to $50,000. Historically, September has been volatile for Bitcoin, and the rate cut adds uncertainty.
The Fed’s decision, expected on Sept. 18, follows dovish comments from Chair Jerome Powell, fueling optimism about lower rates. Typically, lower interest rates make riskier assets like Bitcoin more appealing as traditional investments become less attractive.
At the time of writing, Bitcoin traded at $56,580, down 5.25% over the past week. A 20% decline would bring it to around $46,000, a level not seen since February. Some analysts, believe Bitcoin needs to hit the low $40,000s before a bull run can begin.
Joe Consorti from The Bitcoin Layer noted that $60,000 has become a consolidation zone for long-term holders, rather than a speculative peak. Meanwhile, trader Daan Crypto Trades observed that Bitcoin remains near its Bull Market Support Band, with no clear movement in either direction.
