Bitcoin price is threatening further downside pressure ahead of tomorrow's interest rate decision after losing key support at $60,000.

Bitcoin (BTC) volatility could create significant price shocks ahead of the US Federal Reserve’s (Fed) next interest rate decision on September 18.

The upcoming interest rate decision could create greater price volatility for the world’s first cryptocurrency, depending on the monetary decision, according to Bitfinex analysts:

“Depending on whether the rate cut is 25 basis points or 50 basis points, market action could swing between optimism and caution in risk reduction in response to a large macro adjustment.

This expected volatility could be reflected in flows across ETFs and futures markets, potentially increasing volatility.”

The forecast comes a day before the Fed is widely expected to deliver its first interest rate cut since the start of the COVID-19 pandemic.

Many analysts are increasingly calling for a Bitcoin breakout in October, which could be triggered by the Fed's decision to cut interest rates.

Bitfinex Analysts: $52,000 is Bitcoin's Bottom

Bitcoin recovered above the psychological $60,000 mark on September 14 for the first time since August 30, but lost the key support level on the same day.

However, Bitcoin’s recent price action shows the token bottoming out around $52,000, as Bitfinex analysts explained:

“Our previous view that Bitcoin’s drop to $52,756 on September 6 could be a potential local bottom has been validated.

The price has since rallied more than 15%, supported by a significant increase in Bitcoin ETF inflows of $403.9 million over the past week.”

Bitfinex analysts have previously called for a Bitcoin price correction as low as $50,000, which could represent a “pivotal point” for the market ahead of the next rate cut.

Markets expect 50 basis point rate cut, but analysts disagree

According to the latest data from the CME FedWatch tool, the odds for a 25 basis point rate cut are now 33%, while the odds for a 50 basis point cut are 67%.

While most favor a larger rate cut, Bitfinex analysts believe a 25 basis point rate cut is more likely.

Additional analysts:

“There was a slight pick-up in core inflation, which we think will make the Fed more cautious about cutting rates, and we expect a smaller 25 basis point cut, rather than a big 50 basis point cut.”

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