Bitcoin and Altcoins Come Under Pressure Ahead of Fed’s Interest Rate Decision on May 1

by

Over the last weekend, the cryptocurrency market took a hit. Bitcoin dropped 2.2%, bringing its price under $62,500. The altcoin space wasn’t spared either, with the top ten coins correcting anywhere from 4-10%.

Over the past weekend, the cryptocurrency market as a whole experienced continued downturn. Bitcoin saw an additional decrease of 2.2%, bringing its price below $62,500. In contrast, the altcoin sector endured even greater selling pressure, with the top ten cryptocurrencies experiencing corrections ranging from 4-10%.

Fed Interest Rate Decision on May 1

This week features significant economic milestones for the United States. The Federal Reserve is set to announce its interest rate decision on May 1, with analysts estimating a 95.6% likelihood that rates will remain unchanged. Furthermore, on May 3, the U.S. will reveal the unemployment rate for April. The possibility of an interest rate reduction in the U.S. this year has dropped drastically to only one percent.

This week, new data from the United States has come to light, revealing some concerning trends. The GDP growth rate was weaker than anticipated, indicating a possible economic deceleration. Meanwhile, an uptick in Core PCE figures hints at ongoing inflation worries, creating dilemmas for the Federal Reserve.

Despite concerns that the United States could experience stagflation, marked by a declining economy and elevated inflation, this is still a possibility rather than a certainty at this point. The financial world has adjusted its perspective accordingly, estimating just one interest rate reduction in 2024 as opposed to the initial predictions of seven reductions at the beginning of the year and three in March.

What’s Ahead for Bitcoin and Altcoins?

In the most recent market report, Bitcoin’s (BTC) price volatility noticeably decreased, shifting from 70% to 50%. Simultaneously, Ethereum‘s (ETH) risk reversals downside skew has grown stronger, reaching a level of -13% in the near term. This indicates increasing uncertainty regarding the SEC’s decision on approving spot Ethereum ETFs, potentially causing further delays.

As a researcher studying market trends, I’m left pondering this question: has the market sentiment truly changed, or is this a momentary pause within an ongoing bullish trend? Amidst the uncertainty, there’s a glimmer of hope on the horizon – the upcoming launch of Hong Kong Bitcoin and Ethereum spot ETFs next week. This potential positive catalyst could significantly impact the market dynamics.

Excitement is building among market players as they look towards this event as a possible avenue for the large-scale entry of Asian institutional investors into the cryptocurrency market.

Read More

2024-04-29 10:04