Bitcoin price prediction: will BTC rise or fall after Fed rate cuts

Bitcoin is at a critical juncture ahead of an anticipated Federal Reserve interest rate cut this Wednesday, with high probabilities of a reduction historically favoring risky assets and currently evidenced by robust ETF inflows, including $2.68 billion into Bitcoin ETFs over six days. However, significant near-term risks persist, such as a potential 'sell-the-news' event, market instability if the Fed's decision is perceived as politically motivated, and bearish technical indicators pointing to a possible retreat to $100,000 before a projected Q4 rebound to new highs.

Analysis

Bitcoin is positioned at a critical inflection point ahead of an anticipated Federal Reserve interest rate cut, with market dynamics presenting a classic conflict between bullish fundamentals and bearish near-term technicals. The probability of a rate cut is priced in at over 90%, a historically positive catalyst for risk assets like Bitcoin. This is underpinned by substantial capital inflows, with Bitcoin ETFs attracting over $2.68 billion in six consecutive days, bringing cumulative inflows to over $57 billion and total assets under management to $152 billion. However, this bullish positioning is tempered by significant near-term risks. The high anticipation of the rate cut creates a potential 'sell-the-news' scenario. Furthermore, technical analysis indicates weakness; a rising wedge pattern on the weekly chart, coupled with bearish divergence on the MACD and RSI indicators, suggests a potential pullback to the $100,000 psychological level. An additional macro risk, articulated by JPMorgan, is that a Fed decision perceived as politically motivated could destabilize broader U.S. financial markets, creating headwinds for all risk assets.

Key Decisions for Investors

• Given the bearish technical signals, including a rising wedge pattern and negative MACD/RSI divergence, investors should prepare for a potential near-term price correction toward the $100,000 level, potentially triggered by a 'sell-the-news' reaction to the widely expected Fed rate cut.
• Monitor fund flows into spot Bitcoin ETFs as a primary indicator of institutional conviction; the recent strength, with $2.68 billion in inflows over six days, is a key support, and any significant slowdown or reversal could signal a shift in market sentiment.
• For investors with a longer-term horizon, any significant price weakness following the Fed announcement could represent a strategic accumulation opportunity, aligning with the article's forecast of a potential rebound to a new all-time high in the fourth quarter.