As a seasoned crypto investor who has weathered numerous market cycles, I can’t help but feel a sense of deja vu when reading this analysis. The prediction of a potential 15-20% drop in Bitcoin price following an interest rate cut is not unfamiliar territory for us veterans.
According to an analyst from Bitfinex, there’s a possibility that the value of Bitcoin could decrease by 15-20% if interest rates are lowered this month. This potential decrease could cause the price of Bitcoin to fall within the range of $40,000 to $50,000.
According to the analyst’s analysis, they anticipate this prediction due to previous patterns, where Bitcoin’s growth tends to decrease by approximately 60-70% during each cycle. Historically, September has been a turbulent month for Bitcoin, with an average drop of around 24.6%.
Starting from early August, Bitcoin has experienced a surge of approximately 32%, driven by market anticipation that the Federal Reserve might adopt a more accommodative stance. If the Fed decides to reduce interest rates by 0.25%, this move could potentially stimulate long-term price growth in Bitcoin, due to enhanced liquidity and diminished concerns about a recession.
If the Federal Reserve reduces interest rates by 0.5%, it’s possible that Bitcoin may initially increase in value. Yet, should worries about an economic downturn intensify, a subsequent drop in Bitcoin’s price might occur.
The value of Bitcoin is starting to follow trends similar to traditional assets such as the S&P 500, which means its price can be influenced by global economic factors. The actions taken by central banks like the European Central Bank, Bank of Japan, and China’s liquidity measures could potentially impact Bitcoin’s market value as well.
Reducing interest rates might lead to a substantial decrease in Bitcoin’s value, considering its past market fluctuations in September. Therefore, investors need to exercise caution, as there could be a sudden and steep drop in price.
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2024-09-03 12:04