Altcoin
Analyst’s Lower Altcoin Predictions Among Key Economic Indicators: Report
A famous crypto analyst Michael van de Poppe recently expressed his opinion on altcoins suggesting that a bottom could form. This forecast comes at a time when the market is preparing for a crucial day for the most important macroeconomic indicators, starting with the Consumer Price Index (CPI), the Federal Open Market Committee (FOMC) and today’s decision on the Federal Reserve interest rate.
These functions are highlighted by Van de Poppe as crucial to changing the situation of the altcoin market. In the past, expectations of such events have had a negative impact on cryptocurrencies, especially alts and especially when dealing with the leader of cryptocurrencies: Bitcoin. Furthermore, recently, the corrections after the Roaring Kitty event and last week’s GameStop drop are not suitable for price action.
However, the analyst highlights a recurring pattern compared to the past FOMC meetings: It turned out that market lows often occurring in the middle of the week had a large rebound in the following days of the week. Most importantly, in reference to previous FOMC meetings, both Bitcoin and altcoins jumped over 10% and 20%, respectively, after both retreated.
The release of CPI data is poised to impact the altcoin market
The CPI data, expected for publication at 2.30pm CET or main consumer price index, the FOMC uses it to determine inflation and necessary adjustments in interest rates. In the recent past, inflation rates have been higher than expected average, with April CPI inflation at 3.5%. Nonetheless, only 3.4% are projected to increase by that rate, as identified above. This is persistent inflation that runs counter to Federal Reserve Chairman Jerome Powell’s statements about sticky inflation.
Some of these are expected annual increases, including CPI Y/Y expected to hit 3.4%, and CPI Month-on-Month (MoM) at 0.1%, Core CPI Y/Y is 3.5% while the core CPI is 3.5%. CPI Y/Y was set at 1.3%. In case the actual numbers are in line with or lower than these expectations, a favorable market reaction is expected.
The FOMC decision and Powell’s speech
The second major event of the day is the FOMC interest rate decision at 20:09:00 GMT, cut by ISDA, then Powell’s speech at 20:30 CET. The recent rate cut adopted by the European Central Bank, the first since 2019, slowly suggests the possibility of the United States doing the same, depending on today’s data on the consumer price index. A inflation rate a higher-than-estimated value could contribute to a rise in the dollar and yields, reducing the prospect of rate cuts in the near future and harming risky assets such as cryptocurrencies.
Cryptocurrency price movements in the altcoin and cryptocurrency markets have witnessed recent fluctuations based on the negative correlation between FOMC meetings and CPI data which may soon change direction. The analyst expects a potential upward revaluation this afternoon, based on the assumptions made, if the FOMC expresses itself in a dovish manner, Bitcoin should reach new highs soon.
The analyst disapproves of the use of trades in this volatile period and recommends watching the reactions of gold, dollar and Treasury yields to today’s data. According to Van de Poppe, the dollar and yields will continue to fall, paving the way for higher altcoin and cryptocurrency markets. To their advantage, this could lead to the approval of The Ethereum ETF bringing the price to an all-time high before the summer.