Bitfinex’s analysts expect bitcoin’s price to potentially drop to the low $50,000s or mid $40,000s if the Federal Reserve cuts interest rates this month. The “historical price action for September also aligns with our view of a projected 20 percent drop in bitcoin prices following a rate cut,” the Bitfinex analysts said.
Analysts Anticipate Bitcoin Falling to $40K Level as Fed Rate Cuts Loom
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Bitfinex Predicts Bitcoin Volatility Amid Upcoming Interest Rate Changes
Crypto exchange Bitfinex released its latest Alpha market report on Monday. It offers forecasts for the cryptocurrency market, focusing on bitcoin’s potential price action amid possible U.S. interest rate cuts.
Regarding bitcoin’s price movement when the Federal Reserve cuts interest rates, the Bitfinex analysts said: “If we were to speculate, we would caution to expect a 15-20 percent decline when rates are cut this month.” Referencing historical BTC trends that suggest diminishing peak returns with each cycle, they detailed:
Assuming the price of BTC at around $60,000 before interest rates are cut, this would place a potential bottom between the low $50,000s or mid $40,000 levels.
“This is not an arbitrary number but based on the fact that the cycle peak in terms of percentage return reduces by around 60-70 percent each cycle and the average bull market correction has reduced as well. But this logic could be negated quite easily if macroeconomic conditions change. These are uncertain times for traders,” the analysts explained. “However, it’s important to recognize that these estimates are speculative and subject to significant variation based on evolving macroeconomic conditions,” they cautioned.
The report elaborates on bitcoin’s historical volatility during September, stating: “September has traditionally been a volatile month for bitcoin, with an average return of -4.78 percent and a typical peak-to-trough decline of 24.6 percent. This volatility is often attributed to the end of the summer trading lull, as fund managers return from vacation and human-driven trading activity increases. The anticipated rate cut in September adds another layer of complexity, potentially exacerbating the marketʼs volatility.”
The Bitfinex analysts described:
This historical price action for September also aligns with our view of a projected 20 percent drop in bitcoin prices following a rate cut.
“However, itʼs worth noting that historical trends also show that when August ends in the red, September has occasionally defied expectations and delivered positive returns,” they noted. The report also highlights a broader context for the cryptocurrency market: “Across the cryptocurrency industry, we also see a growing trend of political and regulatory engagement, alongside significant advancements in trading infrastructure and market adoption.”
What are your thoughts on Bitfinex’s forecast of a potential bitcoin price drop as the Federal Reserve cuts interest rates? Let us know in the comments section below.
