Bitcoin Price Prediction: Fed Cuts Rates by 50 bps – New Bull Run Ahead?

The cryptocurrency world is buzzing with excitement as Bitcoin’s price surges to a new monthly high, reaching $61,783, following the U.S. Federal Reserve’s unexpected decision to cut its key lending rate by half a percentage point.

This bold move has sent shockwaves through the financial markets. With this bullish trend, many are asking: is Bitcoin at the start of a new rally?

Fed Rate Cut Sparks Debate

A rate cut from the Federal Reserve was expected, as Chair Jerome Powell had hinted at it earlier. However, there was uncertainty over whether the cut would be 25 or 50 basis points. When the Fed opted for the larger 50 basis point reduction, some experts were surprised and even warned about potential inflation risks.

As predicted, traditional assets like U.S. stocks struggled, closing much lower. In contrast, Bitcoin and other riskier assets saw positive reactions, with Bitcoin showing a notable rise.

Bitcoin Price Analysis: A General Overview

In the last 24 hours, the Bitcoin market has experienced an increase of at least 2.9%. At the start of this month, the price was just $58,977.11. It slipped to the monthly low of $53,973 on September 6. Since September 7, the price has been consistently growing.

Although it experienced a negative fluctuation between September 14 and 16, buyers took control of the market on September 17. Right now, what we see in a daily chart of Bitcoin is the last three strong bullish candlesticks pushing the price aggressively upward, far beyond the level of $60,000.

Fed’s First Rate Cut Since 2020

The US Fed Funds Interest Rate was around 5.5% in August this year. Between February 28, 2022, and July 26, 2023, it saw rapid growth. At the start of that momentum, the rate was just 0.25%. When the momentum settled, it took the rate to a peak of 5.5%. The rate remained unchanged until the Federal Reserve finally decided to bring down the rate by half a percentage yesterday.

Now, the rate stands at 5%. Interestingly, this is the first time since March 2020 that the Federal Reserve has implemented a rate cut. On June 19, 2019, the rate was at 2.5%. It was brought down to 1.75% on January 29, 2020, and later sharply reduced to just 0.25% on March 15, 2020—probably as part of an effort to fight the pandemic. 

Anyway, the new move by the Federal Reserve is an opportunity for risky assets to accelerate their performance. Certain assets like Bitcoin have already shown the first signs of growth, which could influence future Bitcoin price predictions.

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Is the Fed’s rate cut a game-changer for Bitcoin? Let us know your predictions.