Bitcoin Faces Resistance at $116K as Schiff Says Fed Cut Could Deepen Risks

• Bitcoin price stalls at $116,000 as investors await Fed rate cut decision.
• Peter Schiff warns rate cuts may deepen risks while gold and silver shine.

Bitcoin price is facing resistance at $116,000 as traders prepare for the U.S. Federal Reserve’s policy decision this week. The crypto market has been unsettled, even though Bitcoin gained around 4% over the past seven days. Selling pressure over the weekend showed that confidence is still fragile. However, gold and silver continued to attract steady buying.

Peter Schiff Cautions on Fed Move and Bitcoin’s Struggle

The Federal Open Market Committee will meet on September 17, with everyone expecting Chairman Jerome Powell to announce a rate cut of at least 25 basis points. Many investors see this as the start of a new easing cycle, but not everyone agrees it will be helpful. 

In line with the current situation, Economist Peter Schiff has warned that cutting rates at a time when inflation is still high could create more problems instead of solving them. Schiff, who has long been critical of Bitcoin, pointed to the different paths taken by assets in recent weeks. 

As discussed earlier, gold and silver have moved higher, and U.S. stock markets such as the S&P 500 and NASDAQ have reached record highs. Bitcoin, however, has failed to climb past its peak and remains below important levels. He added that in comparison to gold, Bitcoin is still down about 15% from its 2021 high. 

Peter Schiff argued that this gap shows Bitcoin has not been able to act as a safe asset when economic risks rise. He also said that while both stocks and metals are drawing fresh investment, Bitcoin is being sold instead. This, according to him, should raise concern among those who expect the Fed’s decision to spark a strong rally in digital assets.

Meanwhile, another point of discussion in the market is the slowdown in institutional adoption of Bitcoin. As noted in our earlier report, corporate holdings grew by only 47,718 BTC in August, marking a weaker pace than in previous months. Traders are now waiting to see if the September rate cut decision can shift that trend.

Analysts Note Market Patterns

Furthermore, other voices in the market believe the current reaction is not unusual. Analyst Ted Pillows explained that rate cuts often bring weakness to risk assets in the short term. He said history shows that major U.S. indexes have either slowed or fallen in the months following the first cut. 

The concern is that a cut signals that the economy is struggling, which weighs on investor sentiment. Pillows noted that cryptocurrencies do not always follow the same script as equities. In past cycles, digital coins have shown signs of recovery before stock markets. 

Additionally, he pointed out that altcoins have been performing better than Bitcoin since the start of September, which may suggest a shift in momentum within the crypto space. Still, as detailed in our last news piece, Bitcoin ETF inflows recorded $642 million ahead of the Fed rate cut.

Meanwhile, Goldman Sachs expects the Federal Reserve to cut rates three times before the end of the year, with more reductions planned in 2026. This would bring the federal funds rate down to around 3 to 3.25%.