Bitcoin News Today: Bitcoin's "Banana" Curve Warns of Volatility Amid Fed Jitters

The U.S. Federal Reserve's upcoming rate decision has crypto markets on edge, with analysts split on whether a dovish pivot will fuel a Bitcoin (BTC) rally or if macroeconomic headwinds could trigger a sharp correction. Historically, Fed rate cuts have had a mixed but often positive impact on Bitcoin, though the current environment-marked by inflation concerns, geopolitical tensions, and regulatory scrutiny-adds layers of complexity.

In 2019 and 2020, Bitcoin's price reacted unevenly to Fed rate cuts. While initial moves were volatile, prolonged periods of low interest rates, such as those post-2020 pandemic emergency cuts, eventually drove BTC to record highs, surging from $7,000 to over $28,000 by year-end . However, a 2025 analysis of past Fed actions suggests the "rate effect" is overstated. Bitcoin's price often moved independently of rate decisions, with external factors like halvings, ETF approvals, and geopolitical events driving long-term trends .

The Fed's October 2025 meeting faces added uncertainty due to a partial government shutdown delaying key economic data, including the September jobs report. This lack of clarity increases the risk of a policy surprise, such as a pause in rate cuts, which could destabilize risk assets like Bitcoin and equities. Coindesk notes that a 25-basis-point cut is priced in at 96%, but a hawkish pivot or delayed easing could trigger a market selloff .

Legendary trader Peter Brandt has raised caution flags, illustrating Bitcoin's price history as a "banana-shaped" parabolic curve that historically precedes sharp corrections. His analysis places current prices near the upper edge of a rising channel, suggesting a potential pullback if the market fails to break through key resistance levels . Brandt's model, dubbed the "Bitcoin Banana," highlights the cryptocurrency's tendency to surge followed by steep declines, a pattern observed in prior cycles .

Compounding risks include U.S.-China trade tensions. President Donald Trump's recent 100% tariff proposal on Chinese imports triggered a $19 billion liquidation event in crypto markets, with Bitcoin plunging over 12% to $113,000. The sell-off, described as a "black swan" event by analysts, exposed leveraged positions and underscored crypto's sensitivity to geopolitical shifts .

Despite these risks, institutional adoption and Bitcoin's role as an inflation hedge remain bullish factors. A dovish Fed could inject liquidity into risk assets, weaken the U.S. dollar, and encourage capital flows into crypto. However, Bitcoin's market cap-now over $1.3 trillion-requires significantly more capital to replicate the explosive gains seen in 2020-2021 .

Experts warn of a potential "buy the rumor, sell the news" scenario, where Bitcoin rallies on rate-cut expectations but corrects post-announcement. Capwolf analysts note that Bitcoin's current $115,382 price could test $120,000-$125,000 levels if the Fed signals further easing, but persistent inflation or hawkish comments could cap gains .

The path forward hinges on the Fed's messaging. A dovish stance hinting at sustained rate cuts could reignite a bull run, while a hawkish pivot may force Bitcoin to retest $100,000 support. Meanwhile, geopolitical and regulatory risks-such as Trump's trade policies or potential crypto regulations-add volatility.

[1] Is Bitcoin Price Set For Next Rally? - Forbes (https://www.forbes.com/sites/greatspeculations/2025/09/15/how-bitcoin-price-reacts-to-fed-rate-cuts/)

[2] Could Crypto and Stocks Face a Major Correction if This (https://www.coindesk.com/markets/2025/10/05/the-fed-s-next-move-on-oct-29-how-a-scenario-few-expect-could-derail-u-s-stocks-and-crypto)

[3] Fed Rate Cuts Impact: Bitcoin & Altcoins Outlook - capwolf.com (https://capwolf.com/fed-rate-cuts-impact-bitcoin-altcoins-outlook/)

[4] Bitcoin and Fed Rate Cuts: Why the "Rate Effect" Is Overhyped? (https://foreck.info/en/insights/bitcoin-and-fed-rate-cuts-why-the-rate-effect-is-overhyped)

[5] Legendary trader's 'banana' chart issues warning for ... (https://www.thestreet.com/crypto/markets/legendary-traders-banana-chart-issues-warning-for-bitcoin)

[6] Peter Brandt's "Bitcoin Banana" Charts Bitcoin's Enduring Parabolic ... (https://bitparse.com/peter-brandts-bitcoin-banana-charts-bitcoins-enduring-parabolic-growth/)

[12] Trump's new 100% tariffs on China triggered a $19 billion ... - CNN (https://www.cnn.com/2025/10/11/business/trump-tariffs-crypto-selloff)