Bitfinex Alpha: Expected 25 Basis Point Fed Rate Cut, BTC Faces Volatility Risk

Article is form Jinse
September 16, 2024
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According to Golden Finance, a Bitfinex Alpha report predicts a 25 basis point reduction in the Federal Reserve interest rate, putting BTC at risk of volatility. Over the past week, BTC ETFs recorded a net inflow of $4.039 billion, reversing the long-term outflow of funds and signaling renewed investor confidence in the asset. This rebound was primarily driven by aggressive buying in the spot market. In contrast, futures and perpetual contract markets saw less significant volatility, indicating that the current price rise is based on real capital inflows rather than speculative leverage, providing a more sustainable basis for the rebound. However, BTC currently faces a critical resistance level between $60,500 and $61,000, which has been crucial since early March. While ETF inflows remain strong, there are signs of potential stagnation as spot CVD (the difference between buy and sell orders on exchanges) slowed over the weekend.

Analysis suggests that market volatility is highly likely this week, driven by investor anticipation of the Fed's interest rate decision. Regardless of whether the cut is 25 or 50 basis points, the market could swing between bullish optimism and cautious risk aversion. Meanwhile, Bitcoin's correlation with stocks is strengthening, indicating that traditional financial market movements could increasingly impact Bitcoin's price. Bitcoin also decoupled from gold, which hit an all-time high last week, suggesting that investor preference is shifting towards traditional safe-haven assets in a risk-off environment.

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