Bitcoin (BTC) sought to flip $62,000 to support on Sept. 19 as markets digested a rare 0.5% interest rate cut by the United States Federal Reserve.
BTC/USD 4-hour chart. Source: TradingView
BTC price sees three-week highs as Fed cuts big
Data from Cointelegraph Markets Pro and TradingView followed continued BTC price strength during the Asia trading session.
Local highs of $62,600 followed the Fedâs move, which was only the third time in history that a rate-cutting cycle had begun with a 0.5% reduction.
These, in turn, liquidated short BTC positions across exchange order books. Data from monitoring resource CoinGlass put the total for the 24 hours to the time of writing at $128 million.
âNow we need to reduce leverage or take profits,â it told followers on X in subsequent analysis, warning them not to âget carried away.â
BTC liquidation heatmap (screenshot). Source: CoinGlass
Previously, Cointelegraph reported on a BTC price prediction calling for $64,000 in the event of a 0.5% cut, this ultimately proving too much for bulls to muster as significant resistance lingered overhead.
âBitcoin slowly eating its way through the resistance level,â popular trader Jelle reported on X.
âAbove $62,500, things will look a lot more constructive, and stops above $65,000 won't be safe anymore. Going to be an interesting end to September.â
US Dollar Index (DXY) 1-hour chart. Source: TradingView
The US dollar saw volatile conditions, meanwhile, with the US Dollar Index (DXY) initially also rising before giving up its gains to return to prior support.
âSitting at the edge of support. Breakdown can result in a sharp move towards 96,â popular trader Aksel Kibar responded in his latest DXY analysis on X.
US dollar index (DXY) 1-month chart. Source: Aksel Kibar/X
For Arthur Hayes, former CEO of crypto exchange BitMEX, attention was now on the Bank of Japanâs own rates decision due on Sept. 20.
The strength of the yen would, in turn, influence BTC price performance, he suggested.
Source: Arthur Hayes
âSomething doesnât add upâ
Zooming out, however, trading resource The Kobeissi Letter had a clear warning for risk-asset traders.
While seemingly boosting liquidity, rate-cutting cycles beginning with a 0.5% decrease ultimately result in losses for US equities.
âIn 2001, the market fell 31% after 2 years and in 2007 the market fell 26% after 2 years. These were major crises,â part of an X thread recalled.
Kobeissi contrasted the Fedâs upbeat message with the scale of its policy dial-back, suggesting a contradiction in play.
âIf the Fed has only started with 50 basis point rate cuts during crises, why start with 50 bps this time?â it queried.
âThe Fed continues to say the economy is strong and they are calling for a soft landing. But policy decisions are as if we are in a crisis. Something doesn't add up here.â
Fed target rate probabilities. Source: CME Group
Data from CME Groupâs FedWatch Tool showed odds of another 0.5% cut being less likely than a smaller 0.25% follow-up at the Fedâs next meeting on Nov. 7.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.