The price of Bitcoin (BTC) could fall another 20% in coming months, according to a new analyst report from cryptocurrency exchange Bitfinex.
The bearish forecast comes as Bitcoin’s price slumps to begin September, declining 2.25% to currently trade at $56,600 U.S.
Bitcoin’s price is now down 7% over the past month, though it is clinging to a 28% year-to-date gain and continues to lead most cryptocurrencies.
Bitfinex is warning of increased volatility ahead and says that the expected interest rate cut from the U.S. Federal Reserve at its next policy meeting on Sept.18 is likely to not be enough to counter fears of a recession in America.
As a result, Bitcoin (BTC) could drop as much as 20% and bottom around $40,000 U.S. between now and Halloween.
Bitfinex’s report adds that even a bigger-than-expected 50-basis point interest rate cut likely won’t be enough to ease mounting anxiety about a slowing U.S. economy, which has gripped Wall Street and led to a selloff in risk assets such as cryptocurrencies
The report also notes that cryptocurrencies are likely to experience “seasonal effects” in coming months, with September typically one of the weakest months of the year for crypto.
Conversely, October through April has historically been the strongest time of the year for Bitcoin and other digital assets.
In its conclusion, the Bitfinex report states that attractive entry points and buying opportunities for Bitcoin and other cryptocurrencies could emerge in coming weeks.
