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With the United States Federal Reserve poised to implement a new monetary policy in September, Bitfinex analysts warn that the agency’s decision could adversely affect bitcoin’s price.from Bitfinex, the analyst team stated that BTC could face a decline of up to 20% if the Fed decides to cut interest rates lower. They pointed out that the expected rate cut could “significantly influence both bitcoin’s short-term volatility and long-term trajectory.
On the other hand, implementing a more aggressive 50 basis point cut could temporarily spike bitcoin’s price by up to 8%, but this surge would quickly be followed by a major correction due to recession concerns. Bitfinex analysts, however, stressed that conditions are different in the current cycle. Bitcoin has undergone two halving events since 2019, and the global economy is not currently facing the challenges of aThe analysts speculate that bitcoin could face a 15-20% decline in price following a rate cut. According to historical data, cycle peaks in percentage returns typically decrease by 60-70% each time, in addition to a reduction in average bull market corrections.
The analysts added that September’s historic volatility, especially for bitcoin, could further affect market conditions. Since 2013, September typically has an average return of -4.78% for bitcoin and peak-to-trough declines of around 24.6% since 2014.
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