The price of the leading cryptocurrency could plummet to $40,000 following a Federal Reserve rate cut in a bearish scenario, according to Bitfinex, as reported by CoinDesk.
Experts believe that a 25 basis point policy easing would be positive for markets. However, a 50 basis point cut might initially lead to a 5–8% surge, followed by increased concerns about an economic downturn, potentially triggering a deeper correction in risk assets.
Bitcoin could drop by 15–20% after the Fed meeting if the decision is accompanied by signs of a recession. This could result in prices falling to the $40,000–50,000 range, analysts noted.
“Such a scenario would mirror past situations where aggressive rate cuts initially led to asset price increases, followed by a focus on economic uncertainty,” the report stated.
K33 highlighted that the current month presents an attractive opportunity to purchase digital gold due to the seasonally strong year-end.
“Buying the dip in September to build a position for the fourth quarter has historically been the best spot strategy,” specialists indicated.
According to analysts, the pressure from large sales by various governments and Mt.Gox has mostly subsided. By the end of the year, approximately $14.5 billion will be redistributed among FTX creditors, some of which may enter the cryptocurrency market.
Earlier, QCP Capital suggested buying digital gold during corrections in September and taking profits in October or towards the end of the year, considering its seasonality.
Former BitMEX CEO Arthur Hayes previously attributed Bitcoin’s decline to a liquidity shortage.