Bitcoin hits $62.6k as Fed ‘crisis’ move sparks US stocks warning

Bitcoin looked to break $62,000 for support on September 19 as markets saw the U.S. Federal Reserve barely cut interest rates to 0.5%.

BTC price sees three-week highs as Fed cuts big

Data from Cointelegraph Markets Pro and TradingView tracked Bitcoin (BTC) price strength during the Asian trading session.

A domestic high of $62,600 followed the Fed's move, marking just the third time in history that a rate cut cycle started with a 0.5% drop.

These, in turn, liquidated the short BTC positions on the exchange's books. CoinGlass has made $128 million in total over the past 24 hours at the time of writing, according to tracking data.

“Now we have to cut profits or take profits,” he told X's followers in a series of analysis, warning them not to “get caught”.

Earlier, Cointelegraph reported a 0.5% drop in BTC price forecast to $64,000, which proved too much as it finally met with strong resistance from the bulls.

“Bitcoin is slowly eating its way out,” noted trader Jelle on X.

“Above $62,500, things look more constructive, and stops above $65,000 may no longer be safe. It will be fun at the end of September. “

The US Dollar saw volatility, meanwhile, with the US Dollar Index (DXY) initially rising before giving up gains to return to previous support.

“It is sitting on the edge of support. A break could lead to a sharp move towards 96,” noted trader Axel Kibar responded in his DXY analysis on X.

For Arthur Hayes, former CEO of crypto exchange BitMEX, attention was now on the Bank of Japan's own rate decision due on September 20.

He also pointed out that the strength of the yen will affect the price performance of BTC.

“It doesn't add up.”

But by minimizing trading resources, Kobesi's letter had a clear warning for risk-asset traders.

RELATED: Markets Eye 0.5% Fed Rate Cut – 5 Things to Know in Bitcoin This Week

While they seem to boost liquidity, cycles of rate cuts that start at 0.5% eventually result in losses for US stocks.

“In 2001 the market was down 31% after 2 years and in 2007 the market was down 26% after 2 years. These were major crises,” noted the X thread section.

Kobeisi contrasted the Fed's encouraging message with the policy dial scale, pointing to the contradiction at play.

“If the Fed only started with 50 basis point cuts during the crisis, why is it starting with 50 bps this time?” he asked.

“The Fed continues to say the economy is strong and they're looking for a soft landing. But the policy decisions are like we're in a crisis. Something doesn't add up here.”

Data from CME Group's FedWatch Tool showed another 0.5% rate cut is less likely than a 0.25% rate hike at the Fed's next meeting on November 7.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.