In a report on September 2nd, Bitfinex analysts pointed out that after the Federal Reserve announced a rate cut this month, Bitcoin may fall 15-20% and hit a bottom between $40000 and $50000.

If we were to speculate, we would warn that there could be a 15-20% drop when interest rates are cut this month, and BTC's bottom could be between $40-50k. This is not an arbitrary number, but based on the fact that the peak percentage return of each cycle will decrease by approximately 60-70%, while the average magnitude of bull market adjustments is also decreasing. But if macroeconomic conditions change, this logic is easily overturned

Bitfinex analysts pointed out that September has always been a month of significant volatility for Bitcoin, and the expected Fed rate cut will only increase market complexity. Coupled with the possible "sell news" reaction after the rate cut, it may bring both risks and opportunities for traders.

On the other hand, the increasing correlation between Bitcoin and traditional risk assets such as the S&P 500 means that its price fluctuations will still be closely related to global macroeconomic conditions. Bitfinex analyst explained:

"The actions of other major central banks, such as the European Central Bank's possible suspension of interest rate hikes in the context of slowing growth, the Bank of Japan's cautious attitude in the slow recovery of the economy, and the targeted liquidity measures taken by the People's Bank of China to support China's economic slowdown, may trigger a chain reaction in the global market and affect digital assets such as Bitcoin."

Investors typically believe that higher risk assets such as Bitcoin are more attractive during interest rate cuts, as traditional assets such as bonds and time deposits have lower returns and less appeal. But recently, there have been more and more opposing views emerging.

According to a previous report by Zombiet, BitMEX founder Arthur Hayes recently posted on X stating that the Federal Reserve's interest rate cut may not be of much help to the price of Bitcoin due to reverse repurchase agreements (RRPs). Arthur Hayes pointed out that the current interest rate paid by RRPs is 5.3%, which is higher than the yield of short-term treasury bond, which only pays 4.38%. As a result, large money market funds are withdrawing their funds from treasury bond and investing them in reverse repurchase agreements, which leads to a decrease in funds used for risky assets (such as cryptocurrency) in the market.

In the latest long article, Arthur Hayes further stated:

If the Federal Reserve does not cut interest rates before the September meeting, I expect Treasury yields to continue to be lower than RRP. Therefore, the balance of RRP may continue to increase, while Bitcoin may hover at its current level, and in the worst case, it may slowly fall to $50000. Let's wait and see. My changing perspective on the market has made me hesitate on the buy button. I did not sell cryptocurrency because I hold a pessimistic attitude towards the short-term market. As I will explain, my pessimism is only temporary