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Following the strong US jobs report from Friday and the hawkish stance taken by Federal Reserve Chair Kevin Warsh the week prior, the odds for a rate hike have grown significantly in just seven days. Bitcoin’s price reacted to both developments with a minor leg down before it recovered some of the losses. An actual rate increase, though, could have a much more profound effect. What Happens to BTC The previous FOMC meeting in July was quite condensed, as it was described as the most unpredictable one in over six years. At the end, though, the Fed refused to change the rates, leaving them at 3.50%-3.75% following a 9-3 vote. However, the fact that there were 3 policymakers in favor of such a monetary pivot was the first hint at a potential change. The rest came in the past week or so, as Warsh was quite hawkish during his first Jackson Hole speech at the end of August. The blowout US jobs report from yesterday only tilted the odds further, currently being at over 50% for a hike, since it gives the central bank leeway to keep fighting the stubborn inflation through a tighter monetary policy. Next week’s CPI data will be crucial. The FOMC meeting will take place on September 15-16, and ChatGPT believes BTC’s initial reaction will be a nosedive. However, the AI platform added that it “would not expect another catastrophic bear-market leg.” Instead, it noted that the key part of bitcoin reaction will be from the fact of whether the hike is “already fully priced in by then, and what Kevin Warsh says about what comes next.” “At the moment, markets are putting roughly a 60% probability on a September hike after the surprisingly strong August jobs report. BTC is around $79,650 after already falling from above $81,000 as that probability increased.” Precise Prediction The popular AI chatbot noted that another 2%-5% decline is expected in ten days after the conclusion of the FOMC meeting if the Fed indeed proceeds with hiking the rates. This means that bitcoin would test the $75,000 support at first. Another leg down to $72,000 could be in the cards if yields continue climbing by the end of September. Moreover, it could slip below $70,000 for the first time since mid-August if Warsh remains hawkish. Those scenarios are in case the Fed increases the benchmark by 25 bps. In the more unexpected scenario in which the central bank hikes it by 50 bps, then ChatGPT expects BTC to slump by up to 15% very quickly, going to under $70,000 within a day or so. “A drop to $68,000 could be instant, with leveraged liquidations potentially producing a temporary wick into the mid-$60Ks,” it warned. Although all of those predictions sound quite worrisome for BTC, which finally had some fresh air during the mid- to late-August rally , it’s worth noting that the cryptocurrency is known for often moving in the opposite direction of what people expect from it. The post We Asked AI: What Happens to Bitcoin’s Price if the Fed Hikes Rates in 11 Days? appeared first on CryptoPotato .