Bitcoin Faces Critical Tipping Point Amid Fed Uncertainty and Analyst Warnings

Bitcoin has been facing some tough times lately. Over the past month, it’s been hanging around a "critical tipping point." The price nearly doubled at the start of 2024, but recently, it’s lost some steam. Traders are getting anxious about what the Federal Reserve might do next with its monetary policy.

Goldman Sachs has raised a red flag. They warn that the upcoming jobs report could lead to a stock market crash. This comes as experts caution about a potential crisis with the U.S. dollar that could spiral into a "total collapse." Notably, legendary bitcoin trader Arthur Hayes has admitted that his previous predictions about bitcoin’s price were off.

Scott Rubner, a managing director at Goldman Sachs, shared with clients that "a market correction may start to get traction if payrolls are weak on Friday." The payroll report is crucial. Fed Chair Jerome Powell indicated that it will influence the interest rate decision in September. Many expect to see an uptick in hiring and wage growth for August. The Federal Reserve is likely to start cutting rates at their meeting on September 17, as reported by Reuters.

Traders in bitcoin, crypto, and stocks are bracing for hints that the Fed might need to adjust its plans for interest rate cuts this month. They’re also looking for signs that the strong U.S. economy might be slowing down. Rubner pointed out that September has historically been a rough month for stocks, and bitcoin often struggles during this time. However, he mentioned that the "November election becomes a clearing event for risk assets." This could set up bitcoin for a rally after the U.S. elections, no matter who wins—Donald Trump or Kamala Harris.

Meanwhile, the lackluster performance of bitcoin over the summer has led Arthur Hayes to change his short-term price outlook. In a recent blog post, he said, "I have changed my mind, but it doesn’t affect my positioning at all." After leaving BitMex, he started a family office called Maelstrom.

Hayes had initially predicted a new bull run for bitcoin starting in September, expecting liquidity support from the Federal Reserve, U.S. Treasury, and China. He noted, "I expect intervention to begin in late September. Between now and then, bitcoin, at best, will chop around these levels and, at worst, slowly leak lower towards $50,000."

Hayes' new outlook aligns with warnings from analysts at Bitfinex, who said they could see bitcoin prices dropping as low as $40,000 in the short term.