Bitcoin Price Faces Downside Pressure Ahead of Federal Reserve’s Rate Decision

Bitcoin Price Action: Federal Reserve Rate Cut Could Drive October Rally

Bitcoin Price– Bitcoin’s price is currently under pressure as it trades at $59,219, having recently breached the critical $60,000 support level. This technical breach has raised concerns about potential further declines in the cryptocurrency’s value.

Potential Volatility Before Fed’s Rate Decision

The upcoming Federal Reserve interest rate decision on September 18 is expected to introduce increased volatility into Bitcoin’s price action. According to analysts from Bitfinex, this decision could significantly impact the cryptocurrency markets. They note:

Depending on whether the rate cut is 25 basis points or 50 basis points, market behavior could swing between bullish optimism and cautious de-risking in response to major macroeconomic adjustments. This expected volatility might be reflected in flows across ETFs and perpetual markets, which are likely to exhibit increased fluctuations.

Anticipated Rate Cut and Market Reactions

The Federal Reserve is anticipated to announce its first interest rate cut since the beginning of the COVID-19 pandemic. The market is currently bracing for this significant decision, with expectations leaning towards a substantial 50 basis point cut. However, the exact impact on Bitcoin remains uncertain.

Analysts’ Predictions: Bitcoin’s Future in October

Looking ahead, more analysts are predicting a potential breakout for Bitcoin in October. This forecast is based on the anticipated rate cut from the Fed, which could serve as a catalyst for Bitcoin’s price movement. According to Bitfinex analysts, the recent price bottom for Bitcoin was around $52,000. Bitcoin had briefly recovered above the $60,000 mark on September 14, but subsequently lost this support level on the same day.

Rate Cut Probabilities and Historical Trends

The latest data from the CME FedWatch tool shows a 33% chance of a 25 basis point rate cut and a 67% chance of a 50 basis point cut. Historically, October, November, and December have been bullish months for Bitcoin. If these trends continue, the Fed’s interest rate cut could potentially set the stage for a three-month rally, possibly pushing Bitcoin’s price above $92,000 by the end of the year.