Altcoins Tumble $50B as Bitcoin Eyes $130K Amidst FOMC Uncertainty
Crypto Market Braces for FOMC Rate Decision
The crypto market experienced a risk-off sentiment ahead of the U.S. Federal Open Market Committee (FOMC) meeting, particularly impacting altcoins. Despite this, Bitcoin is showing resilience, with analysts forecasting a potential surge to $130,000.
Altcoins saw significant declines hours before the FOMC meeting, influenced by broader macro data and anticipated market updates. Bitcoin's dip to $116.95k preceded this altcoin pullback, although BTC has since recovered to over $118k. The near-term direction for altcoins remains uncertain as the market awaits the Fed's rate decision.
Altcoin Performance Overview
In the last 24 hours:
- Bonk [BONK] led the decline with a 10% drop.
- Pepe [PEPE] decreased by 4%.
- Dogecoin [DOGE] fell by 3%.
Top layer 1 chains also experienced declines:
- Binance Coin [BNB] dropped by 3%.
- Cardano [ADA] decreased by 2.6%.
- Solana [SOL] fell by 2.2%.
The overall altcoin market capitalization decreased by $50 billion in the past 48 hours, falling from $1.57 trillion to $1.52 trillion. This de-risking also led to a decrease in aggregated Open Interest (OI) across exchanges, from $101 billion to $97 billion.
Open Interest in top altcoins like ETH, SOL, XRP, and DOGE combined shrank from $42.5 billion to $41 billion, indicating that traders are moving to the sidelines. Ripple [XRP] saw over $2 billion in OI wiped out in the past week, highlighting the risk-off sentiment.
Potential Catalysts for Altcoin Recovery
Matt Mena, a crypto research strategist at 21Shares, suggests a potentially bullish outlook pending the Fed rate decision and upcoming inflation data (PCE) expected on July 31st. While the Fed is expected to hold rates steady in July, there is a 61.6% chance of a rate cut in September, which could fuel a BTC rally.
"If Thursday’s PCE print comes in soft – and if the crypto policy report offers real substance – BTC could quickly reclaim $120K and push into price discovery."
Mena projects that BTC could surge to $130K and potentially reach $150K by the end of September if the crypto policy report outlines a strategic BTC reserve.
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