A popular crypto analyst Michael van de Poppe has recently given his take on the altcoins suggesting that a bottom may be forming. This forecast comes at a time when the market is preparing for a crucial day in the a much important macroeconomic indicators, starting with the Consumer Price Index (CPI), the Federal Open Market Committee (FOMC), and today’s Federal Reserve interest rate decision.
These functions are highlighted by Van de Poppe as crucial for changing the market situation of altcoin. In the past, expectations of such events have a negative impact on cryptos, especially on alts and especially when it has to do with the leader in crypto – Bitcoin. Also, recently, corrections after Roaring Kitty’s event and the GameStop dip last week are not suitable for price action.
However, the analyst highlights a recurring pattern from previous FOMC meetings: it revealed that market bottoms often occurred in mid of the week presented a great rebound in the subsequent days of the week. Most important to note, touching on the previous FOMC meetings, both Bitcoin and altcoin jumped more than 10% and 20%, respectively, after they both pulled back.
CPI Data Release Poised To Impact Altcoin Market
The CPI data, scheduled for release at 14:30 CET or the core Consumer Price Index, the FOMC uses it in the determination of inflation and requisite interest rate adjustments. In the recent past, inflation rates have been above the projected average, with April CPI inflation at 3.5%. , This is despite the fact that only 3.4 % is expected to increase by that percentage, as identified earlier. This is a persistent inflation that is contrary to the statements made by Federal Reserve Chairman Jerome Powell regarding sticky inflation.
Some of these are the annual expected increases, among which the CPI Y/Y is expected to reach the value of 3.4%, and CPI month-on-month (MoM) at 0.1%, Core CPI Y/Y is 3.5% while Core CPI Y/Y has been established at 1.3%. In case the actual numbers are in line or below these expectations a favorable market reaction is expected.
FOMC Decision And Powell’s Speech
The day’s second major event is the FOMC’s interest rate decision at 20:09:00 PM GMT, it is cut by ISDA, then Powell speech at 8:30 PM CET. The recent rate cut taken by the European Central Bank and which is its first since 2019 hints slowly at the possibility of the U.S. doing the same, depending on today’s data on the CPI. An inflation rate higher than the estimated one could contribute to a higher dollar and yields, lowering the prospects of rate cuts in the near future as well as hurt risky assets such as crypto.
Cryptocurrencies’ price movements in the altcoin and crypto markets witnessed recent fluctuations based on negative correlation between FOMC meetings and CPI data that could soon pivot. The analyst foresee a potential upward repricing this afternoon, based on carried out assumption, if FOMC speaks dovishly, Bitcoin should be at new highs soon.
The analyst frowns at the use of trades at this volatile period and recommends the observing the reactions of gold, dollar and treasury yields to today’s data. According to Van de Poppe, the dollar and yields will continue to go down, paving way for higher altcoin and crypto markets. To their advantage, this may lead to the approval of Ethereum’s ETF boosting the price to all-time high before the summer.
