How will Bitcoin perform in September? Once again the Federal Reserve decides

Although there was a lot of action in crypto markets this summer (remember the Bitcoin rally in the week after the failed assassination attempt on former US President Trump in July and the arrest of Telegram (and Toncoin) CEO Pavel Durov in August), most crypto investors are happy that September is back with a vengeance

Historically speaking, that month is slightly better for the Bitcoin price than August is and so we can finally start looking up again. Well, yes and no, because once again it all depends on a  Federal Reserve decision.

$74,000

September 18th is D-day for markets. On that day, the Federal Reserve holds their quarterly meeting and Chairman Powell is set to announce the first interest rate cut in years to American households. As the United States is still the largest economy in the world, this has a major impact on both stock markets and crypto prices.

#Bitcoin vs Fed Rate Cuts

Bitcoin has seen 5 total rate cuts in its existence.

Crypto has been in one recession (COVID), which was a black swan, and it was the fastest recession ever.

Here’s a chart to show how it performed AFTER the initial cut.

Will this time be… pic.twitter.com/udrqVyi3Fs

— Brett (@brett_eth) August 30, 2024

As the American economy has clearly slowed down in recent weeks and months, it is generally expected that Jay Powell will indeed announce an interest rate cut, although it is not yet certain how large this will be: 0.25% or 0.50%.

Powell already gave a clear hint during his recent speech in Jackson Hole that an interest rate cut could be expected in September. At the time, Bitcoin swiftly rose to $65,000, but the price retracted again to the support level of $58,000 (mainly due to geopolitical pressure and the arrest of Pavel Durov , CEO of Telegram).

Sell the news

The expectation of many analysts is therefore that the crypto markets (just like the stock exchanges) will rebound slightly in the first half of September, in anticipation of that interest rate cut on September 18th. If Powell does what is expected (a 0.50% interest rate cut) and announces more cuts for the rest of the year, a quick rally to the all-time high of $74,000 for Bitcoin cannot be ruled out. In that case, the next level we’re looking at is $80,000.

I fully expect global (Western) stock markets to set new records if this happens.

If Powell remains cautious (an interest rate cut of 0.25% and uncertainty about future interest rate cuts), a sell the news movement downwards can be expected.

In any case, September 18 is the date to look forward to this month. Happy trading everybody.