The Bitcoin (BTC) price is at a critical juncture. The market is waiting for the Federal Open Market Committee (FOMC) meeting on Wednesday. However, expectations that were even just two days ago are no longer even.
If the meeting results in a low bps adjustment, historical trends suggest that BTC prices could see a major correction. If the Fed, under Chairman Jerome Powell, makes a large rate cut, Bitcoin prices will rise. This on-chain analysis explains that the potential gains in the latter scenario could be short-lived.
Bitcoin Whales Sell News
According to data from Glassnode, a cryptocurrency on-chain data platform, Bitcoin whales are selling ahead of the anticipated FOMC meeting. For example, on September 13, there were 108,163 addresses holding more than $1 million in BTC.
Today, Bitcoin whales’ holdings dropped to 106,104 BTC, representing a net selling of over 2,059 BTC worth over $2 billion. This “news selling” behavior reflects a cautious attitude among large holders, and may be bracing for potential volatility as the market awaits further cues on monetary policy.
For example, on-chain data analytics firm Lookonchain reported that a whale sold 500 BTC on Monday. The day before, another Bitcoin whale deposited 119 BTC into Binance. These large selloffs suggest that whales are taking a defensive stance, anticipating short-term turmoil around the conference.
According to FedWatch, a Fed rate decision forecasting site provided by the Chicago Mercantile Exchange (CME) Group, there is a 69% chance of a 50 bps cut and a 31% chance of a 25 bps cut. This tool measures the likelihood of a rate cut.
In August, Fed Chairman Powell hinted at a rate cut in his Jackson Hole speech. The remarks briefly pushed Bitcoin’s price above $62,000. Over the weekend, the cryptocurrency rose to $60,000, but is currently trading below that.
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Possible rate cuts could provide unsustainable gains
While the overall market may be gearing up for a rebound given the probabilities highlighted above, some analysts believe the aftershock will not be sustainable.
One of those who hold this view is Marcus Tillien, head of research at 10xResearch. In a September 16 report, the firm noted that a 50 bps increase is very likely as a result of the FOMC meeting. However, the report also noted that Bitcoin may not see the significant price increase that many market participants are expecting.
“The Fed should consider a 50 basis point rate cut, but its move this week may not provide the significant liquidity boost many are hoping for. Historically, Bitcoin’s performance following rate cuts has been mixed. For example, Bitcoin’s initial rally following the 2019 rate cut was short-lived, with the price dropping 30% a few months later,” Tillien emphasized .
BTC Price Prediction: Bearish Views Are Dominating
On the daily chart, Bitcoin’s price is struggling with the 20-day exponential moving average (EMA). Trading at $58,646, this position suggests that bulls still have no clear path forward to push the price higher.
Instead, the bears continue to apply pressure, limiting Bitcoin’s upside momentum. BTC is also below the 50 EMA (yellow), reinforcing the short-term downtrend.
The Relative Strength Index (RSI) assessment also indicates a potential correction . The RSI, a momentum measurement technique oscillator, is close to its neutral signal line but has not crossed it.
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If this situation continues, BTC could fall to $56,224. In a very bearish situation, the coin could fall to $52,975 after the FOMC meeting. However, this prediction could be invalidated if Bitcoin whales start accumulating coins again after the event.
In that scenario, the price could rise to $64,373, setting the stage for a Q4 rally, which 10x Research expects.
“Even if Bitcoin rallies following the Fed’s rate cut, the gains are unlikely to be sustained as suggested by comparisons to 2019. On-chain data is currently weak, suggesting little real activity is driving the momentum. A rally is likely in Q4, but timing it perfectly will be critical. An unexpected event could reignite market enthusiasm and restore investor confidence,” the report said.
