Bitcoin (CRYPTO: BTC) could potentially slip to a bottom of $40,000 if the Federal Reserve lowers interest rates in the upcoming FOMC meeting as anticipated.

What happened: In a forecast going against the broader market's expectations, analysts at cryptocurrency exchange Bitfinex said in a note to Benzinga that the leading cryptocurrency might fall by 15-20% from its price at the time of the probable rate cut.

That said, the analysts cautioned that the estimates are speculative and subject to significant variation based on evolving macroeconomic conditions.

"September has traditionally been a volatile month for Bitcoin, with an average return of 4.78% and a typical peak-to-trough decline of 24.6%," the analysts said. "This volatility is often attributed to the end of the summer trading lull, as fund managers return from vacation and human-driven trading activity increases."

The analysts attributed the negative forecast to Bitcoin's growing correlation with traditional financial assets, like U.S. stocks, implying that global macroeconomic conditions would continue to influence the leading cryptocurrency's moves.

The argument held water as Bitcoin plunged more than 4% in the last 24 hours following the stock market's biggest fall since the Aug. 5 sell-off.

Additionally, Bitcoin's 30-day correlation with blue-chip indices like the Nasdaq Composite and the S&P 500 rose from being negative at the start of August to 0.41 and 0.25, respectively, by the end of the month, according to data from The Block.

See Also: El Salvador President Nayib Bukele Says Bitcoin Uptake Hasn't Been A 'Resounding Success'

Why It Matters: Investors have been upbeat after Fed Chair Jerome Powell signaled last month at the Jackson Hole Symposium that interest rate cuts are likely.

According to the CME FedWatch tool, traders have priced in a 59% probability of a 25 basis point rate cut, while there was a 41% likelihood of a more aggressive 50% basis point cut.

Investors typically find riskier assets like cryptocurrencies more attractive when the Fed lowers interest rates. This is because many of them invest with borrowed funds, which become easier to avail after monetary easing.