Bitcoin price is likely to face further downside pressure ahead of tomorrow’s interest rate decision after losing key support at $60,000.
Bitcoin (BTC) volatility could introduce further volatile price action ahead of the Federal Reserve’s (Fed) next interest rate decision on September 18.
According to Bitfinex analysts interviewed by Cointelegraph, the upcoming interest rate decision could add further price volatility to the world’s first cryptocurrency, depending on the monetary decision:
“Depending on whether the rate cut is 25 basis points or 50 basis points, market behavior could swing between optimism and caution in risk-off in response to large macro adjustments. This expected volatility could be reflected in ETF flows and the perpetual contract market, which could see increased volatility.”
The prediction comes a day before the Fed is expected to deliver its first interest rate cut since the COVID-19 pandemic began.
Many analysts are increasingly calling for a Bitcoin boom in October, possibly triggered by the Fed's decision to cut interest rates.
Bitcoin at $52,000 is the Dip: Bitfinex Analysts
Bitcoin recovered above the psychological $60,000 threshold on September 14 for the first time since August 30, but lost the key support level the same day.
However, Bitcoin’s recent price action suggests that the Token has bottomed Dip at around $52,000, Bitfinex analysts explained:
“Our previous view that Bitcoin’s drop to $52,756 on September 6 could be a potential local Dip has been validated. The price has since rallied over 15%, supported by a significant increase in Bitcoin ETF inflows of $403.9 million over the past week.”
BTC/USD chart, 1 day. Source: Bitfinex
Previously, Bitfinex analysts had predicted that Bitcoin would correct to lows of $50,000, which could represent a “pivotal point” for the market before the next rate cut.
Markets predict 50 basis point rate cut, but analysts disagree
According to the latest data from the CME FedWatch tool, the probability of a 25 basis point rate cut now stands at 33%, while the probability of a 50 basis point rate cut is 67%.
Rate cut possibility. Source: CME FedWatch
While bets are rising for a larger rate cut, Bitfinex analysts see a 25 basis point rate cut as more likely. The analysts added:
“There is a bit of a stronger core inflation, which leads us to believe that the Fed will be more cautious about rate cuts, and we expect a smaller cut of 25 basis points, rather than a sharper cut of 50 basis points.”
