Bitcoin Dips Post-Fed Cut, Analysts Eye Sept 21 Bull Run

Market analyst Timothy Peterson has identified September 21 as a crucial date for Bitcoin’s price trajectory, dubbing it ‘Bitcoin Bottom Day.’ Historical data reveals that Bitcoin has finished the year higher 70% of the time after this date, with median gains exceeding 50%. Peterson emphasizes that two of the three historical downturns occurred during established bear markets in 2018 and 2022—conditions that don’t reflect the current market environment.

This analysis leads Peterson to believe the probability of a price increase this year is closer to 90% rather than the historical 70%. Furthermore, Bitcoin’s track record suggests it has a nearly perfect chance of holding its gains six months post-September 21. Peterson estimates at least a 70% probability that Bitcoin will not drop below the $100,000 mark again, providing a strong foundation for bullish sentiment.

The recent 25-basis-point rate cut by the US Federal Reserve—the first in nine months—initially provided a significant boost to Bitcoin’s price, briefly pushing it above $117,000 and within 5% of its all-time high. This cut reflects increased liquidity in the market, traditionally a positive catalyst for risk assets like cryptocurrencies. However, the initial enthusiasm has been tempered by market realities.

Ryan Lee, chief analyst at cryptocurrency exchange Bitget, cautions that the median projection of only 50 basis points in total cuts for the year could introduce potential volatility. Historically, Bitcoin has experienced a dip of 5% to 8% following rate cuts before resuming its upward trend, suggesting a possible ‘sell the news’ phase in the coming days. This pattern indicates that while the fundamental outlook remains positive, short-term traders should prepare for potential fluctuations.

Despite near-term volatility concerns, analysts maintain a strongly bullish long-term perspective. Ryan Lee emphasizes the macroeconomic environment’s favorability for alternative investments, noting that lower yields on money-market funds (MMFs) are likely to direct capital toward cryptocurrencies. With approximately $7.2 trillion currently held in cash-like instruments, even a small percentage reallocation could significantly impact Bitcoin’s price.

Multiple analysts have provided ambitious year-end price targets contingent on additional Federal Reserve action. Lee predicts Bitcoin may consolidate in the near term before targeting prices between $123,000 and $150,000 should additional rate cuts materialize. Analysts at Bitfinex share this optimism, projecting that with three anticipated rate cuts by year-end and steady inflows into exchange-traded funds (ETFs), Bitcoin could reach between $125,000 and $135,000.

The analysts also provide a conservative scenario, noting that if inflation or economic growth data hinder the Fed’s ability to proceed with further cuts, Bitcoin might stabilize within a range of $110,000 to $115,000. This floor is supported by growing institutional participation and increasing ETF assets under management, providing structural support that didn’t exist in previous market cycles.