tl;dr
Bitfinex's latest research warns that reactions to the recent rate cut news could lead to a significant decrease in crypto prices in September. The exchange speculates that Bitcoin (BTC) may drop as low as $40,000 in the coming weeks, representing a potential 30% fall from its current value of $57,7...
Bitfinex's latest research warns that reactions to the recent rate cut news could lead to a significant decrease in crypto prices in September. The exchange speculates that Bitcoin (BTC) may drop as low as $40,000 in the coming weeks, representing a potential 30% fall from its current value of $57,701.
Bitfinex notes that September has historically been a volatile and poor-performing month for Bitcoin, linking its performance to central bank monetary policy and traditional financial market actions. The exchange highlights the potential for both risks and opportunities for traders due to increased volatility and the possibility of a 'sell-the-news' reaction following a rate cut.
Additionally, Bitcoin's growing correlation with traditional risk assets like the S&P 500 indicates that its price movements will likely remain closely tied to global macroeconomic conditions.
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.”
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The Art of Technical Analysis: Navigating the Stock Market
In the current market, we observe a clear breakout above the key resistance level, indicating a potential bullish trend. The Relative Strength Index (RSI) also supports this upward momentum, showing a strong buying pressure. Furthermore, the moving average convergence divergence (MACD) indicator suggests a continuation of this bullish trend.
However, it's crucial to note that the price has reached a historically significant resistance level, which may lead to a temporary pullback. Traders should closely monitor this level for a potential reversal or a sustained breakout. Additionally, the Bollinger Bands indicate an increased volatility, signaling the possibility of sharp price fluctuations in the near term.
Overall, while the technical indicators currently favor a bullish outlook, it's essential to remain vigilant and consider the potential risks associated with the prevailing market conditions. As always, past performance is not indicative of future results, and risk management should be a priority in any trading strategy.