Federal Reserve’s Rate Decision Could Ignite Massive Altcoin Rally
NAIROBI (CoinChapter.com) – As the Federal Reserve kicks off its two-day FOMC meeting today, its benchmark short-term rate remains at a 23-year high of 5.25% to 5.5%. This pause follows a series of aggressive rate hikes since March 2022, with the central bank raising rates 11 times.
The goal has been to make borrowing more expensive to cool the economy and curb surging inflation.
Economists anticipated the Fed would cut rates to align with slowing inflation after nearly two years of rate hikes. However, inflation accelerated earlier this year, making predictions of rate cuts uncertain.
Earlier this month, Federal Reserve Chair Jerome Powell informed Congress that he would not signal the timing of future rate actions.
Markets predict no surprises from this week’s decision, with no rate cuts expected until the next FOMC meeting in September. CME Group’s FedWatch Tool estimates a 96% probability of rates staying the same this month but fully priced in a cut for September.
Altcoins Signal Bullish Breakout
Altcoins are forming a cup and handle pattern, suggesting a potential bullish breakout. Michaël van de Poppe, a prominent trader, indicates that the total crypto market cap (TOTAL) is preparing to break its last resistance level at $2.66 trillion.
He predicts that within two to three months, the market will surpass its all-time high and continue its upward trajectory.
Van de Poppe also analyzed the market cap of altcoins, excluding Bitcoin, Ethereum, and stablecoins, using the TOTAL3 chart.
He notes that despite a recent 4% correction, the altcoin market is building momentum for a breakout above $800 billion. Currently, TOTAL3 is trading at approximately $641.572 billion.
Crypto analyst and trader Moustache emphasized the cup and handle pattern in altcoins, highlighting its bullish implications. He suggests that exiting the market ahead of the crucial FOMC meeting might be premature.
Moreover, the analyst’s predictions align with van de Poppe’s bullish outlook, suggesting that altcoins could see substantial growth in 2024.
Federal Reserve’s Influence on Crypto Market
This week’s FOMC meeting and subsequent US jobless claims report could trigger substantial market movements. According to trading resource The Kobeissi Letter, this week will bring volatility, combining economic data, earnings reports, and the Fed meeting.
CrypNuevo, a popular trader, warns that Powell may avoid committing to rate cuts, potentially disappointing investors and causing market volatility. He suggests Powell might emphasize data dependency and the need for further inflation reduction before considering rate cuts.
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