Federal Reserve to Cut Interest Rates Soon? Bitfinex: Bitcoin May See a Rally Followed by a Sharp Decline, Possibly Experiencing a Significant Pullback

The research team at Bitfinex analyzed dynamics such as the US economy and decision-making, future expectations for Bitcoin, cryptocurrency politics and regulations in their latest report. They emphasized that the trend of Bitcoin will be significantly influenced by the decisions of the Federal Reserve, and they believe that an actual interest rate cut may lead to a "Sell the News" event causing further decline in Bitcoin.

Bitcoin Trends and Future Expectations

Despite Bitcoin's recent drop below $60,000, Bitfinex pointed out that it has actually risen by 32% since the sharp decline on August 5, mainly driven by the market's response to the dovish comments from the Federal Reserve. However, Bitfinex also believes that if the Fed decides to cut interest rates, while it may lead to a rapid surge in Bitcoin prices, concerns about economic recession could trigger a pullback afterwards.

Bitfinex emphasizes that despite the positive impact of the halving, Bitcoin's recent trend will be heavily influenced by the Fed's decisions, as evidenced by the August performance.

Bitfinex speculates:

After the rate cut, Bitcoin may experience a 15-20% decline, finding support between $40,000 and $50,000. This is not a random prediction, but based on historical data showing that Bitcoin's peak return rate in each cycle tends to decline by around 60-70%, as well as the gradual decrease in volatility during bull markets over the years.

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Global Macroeconomic Data Unfavorable for Bitcoin in September

Bitfinex again cites historical data, pointing out that September is a month of high volatility for Bitcoin, with an average return rate of -4.78% and a range of approximately 24.6% between highs and lows.

The high volatility, coupled with the potential "Sell the News" reaction after the rate cut, could bring both risks and opportunities to the market. In addition, the increasing correlation between Bitcoin and traditional assets such as the S&P 500 index indicates that its price trend will continue to be closely linked to the global economy.

Another month of waiting? Historical data: Bitcoin always falls in September, rises in October

Crypto Regulation and Political Developments

Bitfinex finally mentioned former President Trump's previous promises regarding cryptocurrency policies and his mysterious crypto project, World Liberty Financial, which demonstrate an increase in political and regulatory involvement in the crypto industry.

In addition, the exchange 24X National Exchange recently submitted a proposal to US regulatory agencies to launch a securities exchange that allows around-the-clock trading of crypto ETFs. Meanwhile, Australia has gradually become a significant player in the global crypto market, with the number of crypto ATMs in the country increasing 17 times in the past two years, making it the third-largest market globally.

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