Bitcoin Price Targets $70k as CME Group Hint 100% Chance of Fed Rate Cut

Bitcoin Price Analysis:

Bitcoin price fell as low as $57,614 on Tuesday Sept 17, down 5% within the last 3-days, but with Chicago Mercantile Exchange Group (CME) hinting, a 100% chance of a Fed rate cut, could this trigger a major breakout above $70,000?

Bitcoin Price Dips 3% as Bulls Sit-and-Watch

Bitcoin price action in the last two-weeks has been heavily influenced positive macroeconomic indicators. However, after testing new monthly timeframe peaks above $60,000, BTC failed to sustain the upward momentum.

Amid growing anxiety ahead of the Fed Rate decision expected on Sept 18, BTC bull traders appear to be taking a sit-and-watch approach, leaving room for bears to force a mild correction.

Since hitting the monthly peak of $61,000 on Saturday, BTC price entered a steep downtrend. The chart above shows how BTC price has 5.15% between Sept 14 and Sept 17, the time of publication.

Barely 24-hours away from the US Fed Rate decision, the recent BTC price action shows that bull have scaled back on the buying pressure, likely waiting on the Fed decision to decide their next moves.

CME Groups Hints 100% Chance of USA Fed Rate Cut

While the official verdict is still up in the air, the Chicago Mercantile Group (CME), one of the largest institutional trading exchanges in the world, having hinted that the US Fed is highly likely to cut rates on Sept 18.

According to analysts at Chicago Mercantile Group (CME), there’s a 100% chance of a rate cut on September 18. This overwhelming expectation suggests that the market is pricing in a more favorable interest rate environment. .

A rate cut could be highly bullish for risk assets, including cryptocurrencies. Lower interest rates reduce the cost of borrowing, increase liquidity, and encourage more speculative investments.

With less incentive to park money in traditional, yield-bearing assets, investors could flock to more volatile and potentially high-reward sectors like crypto. Historically, such actions have been linked to periods of increased inflow into digital assets, especially Bitcoin.

More so, the chart shows that 67% of investors anticipate the target rate will drop to 475-500 basis points, while 33% expect a smaller cut to 500-525 basis points

If the Federal Reserve cuts rates to the 475-500 basis point range, as CME’s chart suggests is 67% likely, Bitcoin could see even stronger upward momentum. This more aggressive rate cut would inject additional liquidity into the economy, making capital cheaper and encouraging more speculative investments.

With such a cut, investors may perceive heightened inflation risks, further pushing them toward assets that are seen as stores of value, such as Bitcoin. Additionally, lower interest rates often weaken the U.S. dollar, enhancing BTC’s appeal as an alternative asset.

A weaker dollar could lead to increased demand for BTC from both institutional and retail investors seeking to hedge against potential currency devaluation.

Bitcoin Price Forecast: $61,000 Retest Could Trigger More Gains

Despite the recent 5% correction in the last 3 days, Bitcoin’s short-term trading indicators remain bullish.

Currently, BTC is trading comfortably above the critical support level of $56,866, reflecting resilience after the pullback. The Donchian Channel, particularly, highlights that Bitcoin is still within a broader bullish trend, with the upper boundary of $61,164 marking the next significant resistance level.

The Donchian Channel’s upper boundary aligns with the $61,164 resistance, hinting at a potential retest of this level. A successful breakout could trigger a stronger bullish rally, driving the price towards $63,000. Meanwhile, ALMA’s slope suggests that speculative activity has fueled recent gains, but the positive price action could gain further strength if macroeconomic catalysts, such as the anticipated US Fed rate cut, come into play.

If the rate cut occurs, this could reinforce the bullish sentiment and catalyze an accelerated breakout above $61,000. Support levels to watch closely are $56,866 and a lower support at $52,568. As investors await the Fed’s decision, the bullish momentum may persist, keeping BTC poised for a potential surge.