On September 3, analysts said that the Federal Reserve's interest rate decision this month could have a significant impact on Bitcoin's short-term volatility and long-term trend. "A 25 basis point rate cut could signal the start of a typical easing cycle, while a more aggressive 50 basis point rate cut could cause an immediate surge in Bitcoin prices, but could be followed by a pullback as recession fears grow," Bitfinex analysts told The Block. Economists are currently concerned about several recession indicators, including Sam's rule, which links rising unemployment to increased recession risk, as unemployment typically leads to reduced spending and slower growth. In addition, analysis from the Federal Reserve Bank of New York shows that an inverted U.S. Treasury yield curve suggests a 50% chance of a recession in the next 12 months. If recession signals affect risky assets, Bitfinex analysts predict that Bitcoin's price could fall by up to 20% from its current value in the weeks following the Fed's September 18 interest rate decision, and could bottom out between $40,000 and $50,000.
