The bitcoin market has seen some consolidation since Monday, holding the price above $56,000 after a brief decline from $65,000 to around $52,600 last Friday.

However, one analyst suggests that bearish sentiment could continue, with a potential return to lower levels before a significant upside move is expected.

BTC’s future price action in focus

Cryptocurrency analysts known as “VirtualBacon” on X (formerly Twitter) have expressed concerns about an impending “massive Bitcoin shakeup.” In the next 2-3 weeks, the analyst explains that Bitcoin may experience one last decline before the bull market begins.

“Panic is everywhere — people are calling for $40,000 lows, saying the bull run is over,” VirtualBacon noted. But he argues that whether Bitcoin falls to $45,000, $48,000, or even $43,000, the bull run remains on the horizon. This period often sees many holders shaken out just before significant rallies.

While the current charts are showing lower highs and lower lows, suggesting downward trendVirtualBacon believes a long-term bear market is unlikely.

The main factor driving such sentiment is the expected injection of liquidity and interest rate cuts by the Federal Reserve, conditions that typically favor growth, especially looking ahead to 2025.

Another key aspect of VirtualBacon’s analysis is Bitcoin’s key support level — the 100-week exponential moving average (EMA). This level has historically marked the end of bear markets, with Bitcoin bouncing off similar levels in 2015 and 2019.

Currently, this support level is around $45,000, with various technical indicators including Fibonacci Retracements and high-volume nodes, suggesting forceful support in the $43,000 to $49,000 range.

Even if Bitcoin does fall into this range, the analyst believes it will likely be a ephemeral “wick” rather than a lasting decline. VirtualBacon also points out that some investors are speculating around $50,000-$51,000.

This could be risky though; hitting these levels could trigger a cascading liquidation that could send prices up to $44,000.

How Upcoming Fed Decisions Could Fuel Bitcoin’s Upward Momentum

Historically, September has been a weaker month for Bitcoin. However, the upcoming months—October, November, and December—tend to show more growth trendsVirtualBacon notes that over the past decade, eight out of ten Octobers have ended positively for Bitcoin, with November also being historically forceful.

The backdrop of this market analysis coincides with the upcoming Federal Reserve Federal Open Market Committee (FOMC) meeting, where the analyst predicts a 70 percent probability of a 25 basis point rate cut and a 30 percent probability of a double cut.

VirtualBacon notes that this could kick off a 12-month cycle of liquidity injection that typically boosts risk assets like BTC and drives the leading cryptocurrency above current levels. all-time highs in the amount of $73,700.

Despite the fear in the market, as indicated by the Fear and Greed Index, the analyst says that this fear may be irrational, especially with the upcoming changes in monetary policy. Once the Fed starts cutting interest rates, sentiment will likely change quickly, potentially leading to renewed interest and investment in Bitcoin.

At the time of writing, BTC was trading at $56,930, up slightly by 0.7% over the past 24 hours.

Featured image from DALL-E, chart from TradingView.com