Bitcoin Headed to $64K: What the Federal Reserve Rate Cut Could Mean

Today, the US Federal Reserve is expected to finally cut interest rates. According to a report by Capriole Investments published on September 17, this could give a significant boost to the price of Bitcoin (BTC). Expectations are that the path to a value of $64,000 is now open for Bitcoin.

Federal Reserve Helps Bitcoin Into the Saddle

Charles Edwards, founder of Capriole, expects Bitcoin to benefit significantly from the macroeconomic changes expected in the fourth quarter. According to him, this is historically the best period for the crypto market. Although the BTC/USD price has not moved much in the past month, Edwards sees the potential for a new bull market once the Federal Reserve cuts interest rates.

The report explains that the Fed is entering a new phase in its interest rate policy. Since the end of 2021, interest rates have risen sharply from 0% to 5.5%, with no significant changes since then.

“This hostile regime coincided with Bitcoin’s crash from $60,000 to $15,000. Now we are on the cusp of a turnaround to a much more favorable environment.”

Edwards argues that the path is clear for Bitcoin, as long as no unexpected negative events occur. He is targeting the upper end of Bitcoin’s current price range, with a potential target of $70,000.

“While the market does not look strong at the moment, with a downward trend of lower highs and lows, the weekly support at $58,000 is holding well. A weekly close above $64,000 would break the downward trend of the past seven months and pave the way to $70,000 or even higher. Still, the technical picture remains mixed, and possibly bearish, until the resistance around $60,000 is broken.”

Bearish on-chain data gives a distorted picture

The report also refutes concerns about bearish signals coming from on-chain data. Edwards argues that factors such as the introduction of Bitcoin ETFs and recent Mt. Gox payouts have skewed these metrics, leading to an overestimation of selling pressure by long-term holders. He argues that this makes much of the on-chain data prior to 2024 unreliable.

Despite this skewed data, Edwards remains optimistic about Bitcoin’s future, especially as we approach the fourth quarter. “We’re in a period where Bitcoin has historically performed well, and the conditions are favorable,” he concludes.

The Federal Reserve’s interest rate decision will be announced tonight at 8 p.m. Dutch time.