If the U.S. Federal Reserve slashes interest rates for the first time in four years later this month, bitcoin analysts at Bitfinex forecast the price of the world’s largest cryptocurrency may potentially drop by up to 20%.
“This is because the positive correlation with traditional asset classes, such as U.S. equities, indicate that global economic conditions will continue to influence bitcoin’s price for now,” the firm told TheStreet Crypto.
Bitcoin {{BTC}} could drop as much as 15%-20% following a September rate cut if the easing cycle is paired with a recession, wrote the team. That would translate to a bottom somewhere in the $40,000-$50,000 range.
"Typically, rate cuts are perceived as bullish catalysts for risk assets," they wrote. "A 25 basis point rate cut would likely mark the beginning of a standard rate-cutting cycle, which could lead to long-term price appreciation for BTC as recession fears ease. Such a move would signal the Fedʼs confidence in the economyʼs resilience, reducing the likelihood of a severe downturn."
Alternatively, a larger 50 basis point cut might result in a short-lived 5%-8% spike for BTC only to be erased by growing concerns of an oncoming recession and more pain for asset prices, Bitfinex added.
"This would mirror past instances where aggressive rate cuts initially boosted asset prices, only for the gains to be tempered by rising economic uncertainties," the authors said. #BTC☀ #fedinterest #intrestrate #PowellAtJacksonHole #Influencer

#BTC☀ #Write2Earn! #downtrendBTC Bitcoin’s price has been showing a willingness to drop lower. However, market fundamentals point to something different.
BTC is down by nearly 10% in the past week, currently struggling to remain above $58,000.Technical Analysis
By TradingRageThe Daily Chart
On the daily chart, the asset has been consolidating around the $60K level, following a rejection from the $64K resistance line and the key 200-day moving average, which is located around the same price mark. The market is currently probable to test the $56K support level.
The RSI indicator has also dropped below the 50% level, indicating a slight bearishness in momentum. Therefore, if the $56K level is not able to hold the price, a further decline toward the $52K support zone would be expected.
The 4-Hour Chart

Looking at the 4-hour chart, it is evident that the market has failed to rise back to the $68K resistance level, which it dropped from initially, as the $64K resistance zone has rejected the price to the downside. As things currently stand, a retest of the $56K level seems highly probable.

Yet, the cryptocurrency might be able to rebound from the level, as the market structure is showing signs of weakness in the bearish trend.
On-Chain Analysis

By TradingRageBitcoin Exchange Reserve

While bitcoin’s price has been going through a lengthy consolidation period over the past few months, investors are wondering whether the market is experiencing an accumulation or a distribution period.

This chart demonstrates the Bitcoin Exchange Reserve metric, which measures the amount of BTC held on exchange wallets. As these coins can be sold quickly, they are assumed to be a proxy for supply.

As the chart suggests, the Exchange Reserve metric has been trending down rapidly since the beginning of the consolidation, indicating that an accumulation phase is happening.

As Bitcoin reserves continue to decline significantly, the chances for a supply shrink, which can lead to a new price rally, are increasing significantly. Yet, the futures market conditions also plays a massive role in price action, and should be considered carefully before drawing any conclusions.