Altcoin
3 Altcoins Likely to Be Dumped Before US CPI Data Releases
Tuesday, the cryptocurrency market suffered a sudden sell-off following Bitcoin’s 3.8% plunge. This supply pressure is likely triggered by market uncertainty ahead of the UP CPI data release scheduled for Wednesday.
The higher-than-expected CPI data indicates rising inflation, which may lead to an interest rate hike by the Federal Reserve. Higher rates make borrowing more expensive, reducing liquidity especially in the riskiest asset class, Bitcoin and other cryptocurrencies.
In a recent analysis, James Van Straten, lead analyst at Cryptoslate, flagged a significant spot selling event for Bitcoin, primarily from Binance, amounting to over $200 million. He noted that Bitcoin tends to collapse before FOMC and CPI announcements due to market overreactions, with a potential reversal after the events.
Van Straten also pointed out that open interest is at an 18-month high and a 10% funding rate, suggesting a potential short squeeze.
While the cryptocurrency market has swung sideways over the past three weeks, an increase in sell-offs could trigger a notable collapse in Altcoins such as Cardano (ADA), Dogwifhat (WIF), and Notcoin (NOT).
1) Cardan (ADA)
ADA, the native cryptocurrency of the Cardano ecosystem has recorded a sideways trend in the last two months. In the context of the broader market consolidation, the coin’s price resonated within two converging trend lines, revealing the formation of a symmetrical triangular pattern.
Cardano (ADA)| Tradingview
On June 8, ADA price breached the support trend line of the triangle structure, indicating sellers of consolidation assets to regain bearish momentum. The post-crash plunge has seen the asset fall 5%, currently sitting at $0.42, while the market capitalization has plummeted to $15.35 billion.
If the pattern holds true and the market reacts negatively to the US CPI data, the Cardano price could extend its correction trend to $0.34.
The ADA price below the daily EMAs (20, 50, 100 and 200) accentuates the past until it reduces the minor resistance.
Read also: Ripple (XRP) vs. Cardano (ADA): How the Crypto Market Collapse Affected Inflows
2)Wife Hat (WIF)
Dogwifhat (WIF) is a memecoin based on the Solana blockchain, featuring a Shiba Inu dog wearing a pink hat as its mascot. Despite the broader market consolidation, WIF price managed to sustain a medium-term uptrend using an ascending support trend line.
Dogwifhat (WIF)| Tradingview
Dynamic support is leading to higher low formation on the daily chart of the WIF, indicating that buyers are actively accumulating this asset on market dips. However, this memecoin has witnessed a notable correction in the last two weeks, going from a high of $4.08 to $2.62 recording a decline of 35.6%.
The Dogwifhat coin currently holds a market size of $2.62 billion, while the 24-hour trading volume increased by 21% to support the price decline and reached $460.1 million.
With a sustained sell-off, the WIF coin will run the risk of losing the aforementioned support. A potential breakout of the pattern’s lower trend will signal a major trend reversal and extend the current correction below $2.
Read also: Dogwifhat Vs Bonk: Which Solana Meme Coins to Keep Until December?
3)Notcoin (NOT)
Noncoin (NOT) is a cryptocurrency project built on The Open Network (TON) blockchain, initially gaining traction as a viral tap-to-earn game on Telegram. On June 2, NOT price immediately reversed from the $0.029 resistance, resulting in a 47% drop to reach $0.015, while the market capitalization fell to $1.642 billion.
Notcoin (NOT)| Tradingview
After an aggressive rally in the second half of May, at least a brief correction was expected for Notcoin. However, as market uncertainty accelerates ahead of the US CPI data, the NOT coin could see a momentum collapse.
With an intraday drop of 10.48, the Not money anticipates a bearish breakdown from the slope of the 20-day EMA. If successful, sellers will tighten their grip on this asset and may extend the correction fall to $0.011, followed by $0.00458.
Take away
Highlighted volatility and a notable decline is commonly observed in the cryptocurrency market prior to the release of US CPI data. Market participants’ FOMO over the state of inflation and potential rate cuts could increase selling pressure in most major altcoins. However, after the event, market supply pressure eases, giving assets an opportunity to rebound.
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