Bitcoin on the Brink: Fed Rate Cut Could Spark Another ‘Blood Monday’
Bitcoin Braces for Fed Decision: Is Another ‘Blood Monday’ on the Horizon?
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Bitcoin (BTC) continues to grapple with a volatile market, struggling to break free from its recent range of $53,000 to $60,000. After a painful drop below the crucial $70,000 mark on August 1st, the crypto king remains vulnerable to further declines, particularly with the looming Federal Reserve (Fed) meeting on September 18th.
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The Fed is expected to announce a rate cut, but the magnitude of the cut is a point of contention. Crypto analyst Doctor Profit believes a 0.50% cut is necessary to address the current economic climate, warning that a smaller 0.25% cut could trigger a repeat of the devastating ‘Blood Monday’ on August 5th, when Bitcoin plunged to lows of $48,900, marking a nearly 25% price drop.
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Doctor Profit argues that a decisive 0.50% rate cut would signal the Fed’s willingness to tackle economic challenges head-on. However, he cautions that the market remains susceptible to manipulation, with the potential for \”scam wicks\” misleading investors. Geopolitical tensions, including the Israel-Lebanon conflict, add to the uncertainty and could amplify market volatility.
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Bitcoin’s Long-Term Prospects Remain Bright
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Despite the short-term risks, Doctor Profit maintains a bullish outlook on Bitcoin’s long-term potential, particularly through the end of Q3 2025. He believes that any short-term panic will be countered by a return to expansive monetary policy, citing the recent influx of USDT and other cash injections into the market. Once the rate cuts are implemented, the Fed’s money printing is likely to resume, providing a foundation for recovery.
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Bitcoin Price Analysis: Navigating the Narrow Channel
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Analyst Ali Martinez observes that Bitcoin is trading within a parallel channel on the hourly chart. A bounce back to the middle or upper levels of the channel, targeting $60,200 or $62,000, is possible if the lower border holds. However, a break below the support level of $58,100 could trigger a drop towards $55,000.
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Taking a broader perspective, Martinez highlights concerning trends in Bitcoin’s Market Value to Realized Value (MVRV) Momentum. Since falling below the $66,750 mark in June, Bitcoin has been in a downtrend. To invalidate this negative trend, BTC needs to break above this level and reclaim it as support, which could signal a continuation of a rally towards the all-time high of $73,700 reached in March.
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As of writing, Bitcoin is trading at $58,440, recording losses of over 3% in the past 24 hours. The crypto community awaits the Fed’s decision with bated breath, as it could determine the immediate future trajectory of Bitcoin’s price.