The Daily Hodl
Bitfinex Says ‘Sell-The-News’ Reaction to Rate Cuts Could Push Crypto Markets Down in September
Daily Hodl Staff September 3, 2024
Research from crypto exchange Bitfinex warns that reactions to recent rate cut news could bring down crypto prices in September.
In its latest research, Bitfinex speculates that Bitcoin (BTC) could fall as low as $40,000 over the coming weeks.
“If we were to speculate, we would caution to expect a 15-20% decline when rates are cut this month, with a bottom of $40-50,000 for BTC. This is not an arbitrary number but is based on the fact that the cycle peak in terms of percentage return reduces by around 60-70% each cycle and the average bull market correction has reduced as well.
But this logic could be negated quite easily if macroeconomic conditions change. These are uncertain times for traders.”
With Bitcoin currently trading for $57,701, a fall to $40,000 would represent a fall of 30% for the flagship cryptocurrency.
According to Bitfinex, September is a historically volatile and poor-performance month for Bitcoin. The exchange says that BTC will likely be tied to central bank monetary policy and price action in the traditional financial markets.
“This volatility, combined with the potential for a ‘sell-the-news’ reaction after a rate cut, could present both risks and opportunities for traders. Meanwhile, Bitcoin’s increasing correlation with traditional risk assets like the S&P 500 suggests its price movements will remain closely tied to global macroeconomic conditions.”
