Bitcoin price might drop by 15-20% following the declaration of federal Resserve’s interest rate decision this month, a Bitfinex analyst warns. This drop could lower Bitcoin’s price to between $40,000 and $50,000.
The analyst bases this prediction on past trends where Bitcoin’s gains typically shrink by 60-70% in each cycle. September is usually a volatile month for Bitcoin, often seeing an average decline of about 24.6%.
Since early August, Bitcoin has risen over 32% as traders expected the Federal Reserve to be more lenient. If the Fed cuts rates by 25 basis points, it could lead to long-term price growth for Bitcoin due to increased liquidity and easing recession fears.
However, if the Fed cuts rates by 50 basis points, Bitcoin might see a short-term price spike but could then experience a correction if recession concerns grow.
Bitcoin’s price is also increasingly moving in line with traditional assets like the S&P 500, making it sensitive to global economic conditions. Moves by other central banks, such as the European Central Bank, the Bank of Japan, and China’s efforts to boost liquidity, could also affect Bitcoin’s price.
A rate cut could cause Bitcoin to drop significantly, given its historical volatility in September. Investors should be cautious as the price might see a sharp decline.
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