FED Interest Rate Decision: How a 0.50% Cut Could Impact Bitcoin and Stocks?

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Seasoned crypto trader Doctor Profit, a popular analyst on X, has shared his bold predictions regarding the upcoming Federal Reserve meeting on September 18. According to Doctor Profit, the market is split between a 0.25% and a 0.50% interest rate cut, but he firmly believes the Fed will opt for the latter. 

Here’s why and what it means for Bitcoin, stocks, and how to manage your portfolio.

FED Rate Cut Report: What’s Next?

Get ready for the big event on the 18th

Here’s what you need to know:

The market expects a 50:50, there’s a 50% chance we’ll see a 0.25% rate cut, and another 50% chance of a 0.50% cut. But remember when I told you two months ago that Jerome… pic.twitter.com/9ninSBIA0V

— Doctor Profit (@DrProfitCrypto) September 15, 2024

Why a 0.50% Cut?

Doctor Profit recalls predicting, two months ago, that the Fed would announce a 0.50% rate cut this September, and now he’s doubling down on that forecast. He suggests that the recent improvements in CPI and PPI numbers were expected, reinforcing his view that the economy is improving faster than analysts had anticipated.

He said a 0.25% cut would be too little for the current economic situation. He warns that if the Fed opts for a smaller cut, it could trigger another “Blood Monday,” similar to the crash seen a few weeks ago. Jerome Powell, eager to avoid another market crash, will likely present the rate cut as a response to falling inflation and a brighter economic outlook, potentially signaling more rate cuts in the future.

Bitcoin and Stocks: A Gamble?

For Bitcoin and stocks, Doctor Profit says it’s a “casino” right now, with extreme volatility expected ahead of the Fed’s decision. He holds his positions in Bitcoin, having called for longs at $50K and $53K during Monday’s crash. However, he cautions traders to prepare for “scam wicks” and manipulations on both sides.

However, he remains bullish mid-to-long term, anticipating the market to stabilize by Q3 2025. He advises traders to take advantage of the fear and panic to buy more during dips but stresses the importance of short-term risk management.

Short-Term Strategy

Dr. Profit stresses the importance of robust risk management in light of potential volatility. He has set stop-losses to protect his positions and advises others to do the same. While he remains bullish on the mid-to-long-term outlook, he emphasizes managing risk carefully in the short term. His strategy involves riding any market pump triggered by a 0.50% cut while safeguarding against potential losses.

Mid-Term Outlook

Looking ahead, he is optimistic about the mid-term. He expects any short-term panic to be countered by increased money printing and cash injections into the market. He believes the economic environment will stabilize despite current volatility, leading to a more positive market trend. Now, all eyes are on the September 18 Federal Reserve meeting. According to analysts, an interest rate cut might spark a Bitcoin breakout in October.