Analysts predict that Bitcoin’s gains could decrease by 60-70% each cycle, with September’s volatility typically leading to an average decline of 24.6%.
A Bitfinex analyst has issued a warning that Bitcoin’s price could potentially decline by 15-20% if interest rates are reduced this month. This forecasted drop could bring Bitcoin’s value down to a range of approximately $40,000 to $50,000.
The analyst’s forecast is grounded in historical trends, where Bitcoin’s gains have typically diminished by 60-70% in each cycle. Moreover, September is known for its volatility, often resulting in an average drop of about 24.6% in Bitcoin’s value.
Since early August, Bitcoin has climbed over 32% as traders speculated that the Federal Reserve might adopt a more lenient approach. A 25 basis point rate cut by the Fed could support long-term price increases for Bitcoin by boosting liquidity and alleviating recession concerns.
Conversely, if the Fed cuts rates by 50 basis points, Bitcoin could experience a temporary price spike, but it might also face a correction if worries about a recession escalate.
Bitcoin’s price is increasingly mirroring traditional assets like the S&P 500, which makes it more susceptible to global economic shifts. Decisions by central banks such as the European Central Bank, the Bank of Japan, and China’s liquidity enhancement efforts could also influence Bitcoin’s price.
A rate cut could trigger a notable decline in Bitcoin’s value, given its history of volatility in September. Investors should be wary, as the price may experience a sharp downturn.
