Though not widely understood, tomorrow marks a pivotal moment in the global economy, with heightened market volatility anticipated. We are entering a new phase that may influence not only cryptocurrencies but also fiat currencies alongside other risk assets. As we approach this transition, what insights can the Federal Reserve’s historical interest rate reduction strategy provide? What predictions do experts have for Bitcoin 
$95,195 and cryptocurrencies?
Historical Interest Rate Reductions by the Fed
Assuming that everyone understands the relationship between interest rate cuts and cryptocurrencies, let’s directly examine historical data. These details are crucial as they allow us to interpret the markets from a broader perspective. September 18 will be a significant day for investors in gold, cryptocurrencies, stocks, and other assets. We have elaborated on the reasons for this extensively.
The three-year dot plot, the magnitude of the rate cut (such as the significance of starting with a 50 basis point reduction), and the tone of messages from Powell are important topics to discuss. Additionally, whether different tools will support economic easing or maintain a rigid stance regarding the balance sheet represents a critical concern.
The markets are currently divided on the size of the rate cut (excluding the letter from Warren and two Senators requesting a 75 basis points reduction), but according to FedWatch, the probability of a 50 basis point cut stands at 60%. However, if the Fed proceeds with a 50 basis point cut, it would indeed be quite historic, as highlighted by The Kobeissi Letter.
Expert Predictions for Bitcoin and Cryptocurrencies
Let’s quickly glance at the latest chart analyses from two analysts after the Fed’s decision is comprehensively evaluated against historical data. Analyst Jelle believes that a bullish movement will trigger above $65,000 in the last quarter, but he suggests remaining cautious for now.
“There’s nothing like Bitcoin rising directly to resistance just a day before a major news event. I’m closing my leveraged positions here; it’s time to stay in spot positions until the dust settles. If we break above the dotted line, the anticipated mega bull thesis for Q4 will become a reality.”
In this scenario, the BTC targets set by analysts for the end of 2024 and the first half of 2025 could turn into a reality, showcasing a journey to new all-time highs for altcoins.
The second crypto analyst, Roman, who correctly predicted the last dip, is confident that those expecting the rally to continue will be mistaken. He suggests that the bullish momentum may retract due to the anticipation surrounding tomorrow’s FOMC decision.
“The rise has been nice, but news-based movements often retrace in anticipation of tomorrow’s FOMC decision. We are currently forming bearish divergences, and daily volume remains relatively weak. I bet most of today’s movement will pull back.”
Time will tell who is right, but the coming hours promise to be quite turbulent.
