Why Altcoins’ Prices Are Falling & When Will They Recover?

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As an analyst with a background in macroeconomics and crypto markets, I’ve seen my fair share of market volatility. The recent selloff in altcoins, including Ethereum, Solana, XRP, and others, has been influenced by several key factors.

As a crypto investor, I’ve observed some volatile price action in the altcoin market recently, with Ethereum, Solana, and XRP among those experiencing declines. Simultaneously, the broader crypto market has taken a hit, and this downturn can be linked to Bitcoin‘s own price slide. The reasons behind this slump have sparked much debate within the community.

Multiple significant economic factors and worldwide tendencies may have influenced the pessimistic outlook lately. Let’s examine the primary causes contributing to the current price decline.

Why is Altcoins Prices Falling?

Some of the top reasons behind the recent selloff include:

Bitcoin ETF Outflow

As an analyst, I’ve observed strong Bitcoin ETF inflows in the United States over the past few weeks. However, on Monday, June 11, there was a sudden outflow of $200.4 million from the Spot Bitcoin ETF. This unexpected reversal has cast a shadow over market sentiment, potentially influencing the recent downturn in altcoin prices.

As a researcher studying the cryptocurrency market, I’ve observed an influx of substantial investments into Bitcoin ETFs recently. This inflow has fueled market optimism and caused Bitcoin’s price to surge over the past few weeks. Similarly, altcoins have experienced considerable price increases as a result. However, there was a slight decline in their prices from the previous week.

U.S. Job Data Triggers Altcoin Decline

As a crypto investor, I’ve observed that last week’s U.S. Job data report surprised us all by coming in stronger than anticipated. This unexpected strength in employment numbers has somewhat dampened my hopes for a dovish stance from the Federal Reserve. However, it is important to remember that the Fed has been steadfastly hawkish this year, with plans to keep interest rates high in order to combat persistently elevated inflation levels.

After making the same declaration, the European Central Bank (ECB) revealed a reduction in interest rates last week. There was widespread expectation that the U.S. Federal Reserve would follow suit; however, recent labor market statistics have dampened these expectations, leaving the market yearning for more definitive economic signals.

Inflation, FOMC, & Fed Chair’s Comment To Impact Altcoins Performance

Following the dismal economic reports released the previous week, there is great anticipation among investors regarding today’s unveiling of the U.S. Consumer Price Index (CPI) inflation figures, Federal Open Market Committee (FOMC) rate decisions, and Fed Chair Jerome Powell’s subsequent press conference. Insights from the CPI data will significantly influence altcoin prices by shedding light on the prevailing inflation conditions within the country. Moreover, market participants will also closely monitor tomorrow’s U.S. Producer Price Index (PPI) data for additional indications regarding inflation trends.

From my perspective as an analyst, the upcoming FOMC interest rate decision carries significant weight in determining market trends in the near term. While the general expectation is for the Federal Reserve to keep its policy rate unchanged, any deviation from this path could potentially influence market behavior. Moreover, the words of Fed Chair Jerome Powell during his subsequent remarks will offer valuable clues about the central bank’s future plans regarding interest rates.

As an analyst, I’ve noticed that the market appears to be showing signs of a pause before significant events, which could lead to increased volatility in altcoin prices.

When Will The Altcoins Prices Rebound?

During this year, the wider cryptocurrency market has experienced price volatility prior to Federal Open Market Committee (FOMC) meetings, similar to what we’ve seen in the past. Following these events, however, the market as a whole has typically bounced back strongly, erasing the losses that had accrued beforehand.

With the expectation that altcoin prices will bounce back following a significant event, it’s important to keep in mind that unexpectedly high U.S. Consumer Price Index (CPI) data could prolong the current market volatility for these digital assets. Additionally, any hawkish comments from the Federal Reserve could further influence the overall sentiment towards the cryptocurrency market.

At present, the price of Solana had decreased by 1.32%, amounting to $152.67, in contrast to XRP which saw a decrease of 0.54% resulting in a price of $0.484. Among meme coins, Dogecoin experienced a decline of 1.08% and was priced at $0.1405, while Shiba Inu underwent a fall of 0.71%, reaching $0.00002207.

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2024-06-12 14:32