Worn down by months of lackluster price action, crypto investors were looking forward to the Federal Reserve cutting interest rates in September as a catalyst for a bull move, but escalating recession fears could bring a deeper correction, according to analysts at Bitfinex.
Bitcoin (BTC) could drop as much as 15%-20% following a September rate cut if the easing cycle is paired with a recession, wrote the team. That would translate to a bottom somewhere in the $40,000-$50,000 range.
"Typically, rate cuts are perceived as bullish catalysts for risk assets," they wrote. "A 25 basis point rate cut would likely mark the beginning of a standard rate-cutting cycle, which could lead to long-term price appreciation for BTC as recession fears ease. Such a move would signal the Fedʼs confidence in the economyʼs resilience, reducing the likelihood of a severe downturn."
