On Monday, the price of Bitcoin experienced a decline, dropping to a low of $57,100. This downturn marked a continuation of its retreat from a one-month peak of $65,000 recorded on August 25. The Federal Reserve’s impending interest rate cut decision poses additional challenges for the leading cryptocurrency.

### Bitcoin Price Projections for September
According to a recent analysis released by Bitfinex Alpha, the upcoming interest rate adjustments could have a substantial effect on Bitcoin’s volatility and overall market trajectory in the short term. Since the beginning of August, Bitcoin has seen a robust increase of over 32 percent, largely fueled by trader expectations of dovish remarks from the Federal Reserve.

It is anticipated that a 25 basis point reduction would initiate a cycle of monetary easing, potentially enhancing liquidity and fostering long-term gains for Bitcoin. However, a more drastic 50 basis point cut could result in an initial price spike followed by a correction as recession apprehensions re-emerge.

Trading behaviors indicate that spot holders are currently reducing their exposure while perpetual market speculators are looking to purchase at lower prices. Notably, there remains considerable open interest in Bitcoin perpetual contracts.

Nevertheless, the report cautions that a rate cut could lead to a price decline of approximately 15 to 20 percent, with potential lows between $40,000 and $50,000. Bitfinex’s forecast relies on historical data illustrating that peak returns tend to diminish by approximately 60 to 70 percent during each cycle, alongside a reduction in average corrections during bullish phases.

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