As Bitcoin (BTC) grapples with a challenging market environment, it has struggled to regain momentum, hovering around the $53,000 and $60,000 levels for six consecutive weeks. 

After losing the crucial $70,000 threshold on August 1, the largest cryptocurrency remains at risk of further declines, particularly with the upcoming Federal Reserve (Fed) meeting on September 18, where a 0.50% rate cut could significantly impact its price.

BTC’s Future Hangs In Balance

Recent insights from crypto analyst Doctor Profit suggest that the market is closely divided, with equal chances—50%—of a 0.25% or 0.50% rate cut. However, Doctor Profit is confident that the Fed will opt for the larger cut, citing a need for decisive action in the current economic climate. He notes, “A 0.25% cut is simply too little for where we are now.” 

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The analyst argues that failing to implement a 0.50% cut could lead to market turmoil reminiscent of the “Blood Monday” experienced on August 5, which saw Bitcoin plummet to lows of $48,900, resulting in a nearly 25% price drop.

According to Doctor Profit, this could include acknowledging the Fed’s past strategies and an optimistic outlook for the economy, potentially paving the way for future rate cuts.

Given these potential scenarios, the analyst warns of the potential for market manipulation and “scam wicks” that could mislead investors on both sides of the trade. In addition, geopolitical tensions, particularly regarding the Israel-Lebanon situation, add another layer of complexity and may exacerbate market fears and volatility.

Despite the short-term risks, Doctor Profit remains bullish on Bitcoin’s long-term prospects, particularly through the end of Q3 2025.

The analyst believes that any short-term panic will ultimately be countered by a return to expansive monetary policy, as seen in the recent influx of USDT and other cash injections into the market. He highlights that once the rate cuts are implemented, the Fed’s money printing will likely resume, providing a foundation for recovery.

Bitcoin Price Analysis

Looking deeper into the current price action, analyst Ali Martinez recently noted that Bitcoin trades within a parallel channel on the hourly chart. 

Martinez contends that Bitcoin could bounce back to the middle or upper levels if the lower border holds, targeting $60,200 or $62,000. However, Martinez warns that a break below the support level of $58,100 could lead to a drop towards $55,000.

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Zooming out to a broader perspective, Martinez also highlights concerning trends in Bitcoin’s Market Value to Realized Value (MVRV) Momentum. Since breaking below the $66,750 mark in June, Bitcoin has been in a downtrend, and this negative trend has yet to show signs of reversal. 

To invalidate this indicator, BTC needs to break above this level and reclaim it as support, which could signal the continuation of an expected rally towards the all-time high of $73,700 reached in March this year.

When writing, the largest cryptocurrency on the market is trading at $58,440, recording losses of over 3% in the 24-hour. 

Featured image from DALL-E, chart from TradingView.com

Bitcoin Price jumped 0.34% during the Sunday trading session, showcasing its sustainability above the $60000 psychological level. The bullish momentum is fueled by whale/institution accumulation and market anticipation of a 0.5% interest rate cut in the September FOMC meeting. 

Will Whale Accumulation Drive Bitcoin Price to New ATH?

According to on-chain data tracker Spotonchain, a giant whale has been actively accumulating Bitcoin since August 29th. So far, the large holder has bought around 3,933 BTC (worth $234 Million) from the crypto exchange Binance with the latest withdrawal occurring earlier today at an approximate price of $59,591 per BTC.

Currently, this whale holds 10,491 BTC (valued at approximately $630 million). Typically, such large transactions boast market confidence, as a price rally follows whales/smart money buying. 

However, the same whale allegedly dumped 7,790 BTC (around $467 million) around June 27 and July 8, 2024, to Binance at ~$59,953, contributing to a sharp 14% decrease in Bitcoin price.

This giant whale keeps withdrawing $BTC from Binance as #Bitcoin broke $60K!

Since Aug 29, the whale has withdrawn a net 3,933 $BTC ($234M) from #Binance at ~$59,591, with the latest withdrawal only 4 hours ago.

Note that this accumulating wave came after the whale had… https://t.co/GBhH2gDT1V pic.twitter.com/yQ6gnqvjpS

— Spot On Chain (@spotonchain) September 15, 2024

Anyhow, the business intelligence company Microstrategy has recently increased its Bitcoin holding by acquiring 18,300 BTC worth $1.11 billion. This purchase brings the company’s total Bitcoin holdings to 244,800 BTC, as Executive Chairman Michael Saylor revealed.

Along with whale/institutional buying, the Bitcoin price rally to $60000 is more likely driven by market anticipation of the September rate cut.

Following the recent cooling of US CPI and PPI inflation figures, speculation is rising over a potential 50 bps rate cut by the US Fed at the upcoming FOMC meeting. According to the CME FedWatch Tool, there is a 50% probability of a 0.5% rate cut by the US Federal Reserve and the same bet for a 0.25% rate cut.

Typically, a rate cut would allow banks to borrow money more easily for operations, boosting capital flow in the market and encouraging increased investment in riskier assets like cryptocurrency.

BTC Price Poised For Major Breakout

The Bitcoin price at $60174 is just 1% away from a major breakout of the downsloping trendline. The dynamic resistance intact since late July drives the current correction trend, and a potential breakout will boost the bullish momentum. 

If the buyers flip overhead resistance into potential support, the BTC price could target $68000, followed by an all-time high resistance of around $73777.

On the contrary note, the Bitcoin price prediction shows a notable resistance at the $65800 mark as over 6.84 Million addresses hold approximately 3.1M BTC.

Therefore, if the potential rebound faces supply pressure at this resistance, the sellers could drive an extended consolation phase for Bitcoin.

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Sahil Mahadik

Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.