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This is where major currencies will revive from the ‘danger zone’ and explode
Popular Cryptocurrency Analyst Michael Van De Poppe recently watched his latest video and discussed the current state and future of the cryptocurrency market, with a focus on altcoins. He said the altcoin market is highly volatile, capable of sharp rallies and also large corrections, as seen recently. Top altcoins are down over 40% over the past two weeks, with some on-chain altcoins falling over 70%.
This volatility raises questions about the future of altcoins or whether the downward trend will continue. Several factors need to be considered regarding the current correction.
Impact of Ethereum ETF Delay
Poppe gave two reasons to explain the scenario. Firstly, he said that Altcoins, as well as Ethereum, are struggling due to uncertainty over when the Ethereum ETF will begin trading. Although the ETF has been approved, it has not yet been listed. This delay is causing confusion and instability in the market.
The approval process involves detailed records to ensure compliance with regulations, but actual trading has not yet begun, leading to ongoing market corrections. Once the ETF begins trading, it could attract more interest from investors and potentially lead to a market rally, similar to what happened with previous ETFs.
Macroeconomic Factors
The second argument revolves around recent macroeconomic events, such as the announcements by the CPI (Consumer Price Index), the PPI (Producer Price Index) and the FOMC (Federal Open Market Committee). These events strongly influence market sentiment and political decisions, particularly with regard to interest rates. The CPI and PPI data were lower than expected, suggesting a potential relief from inflationary pressures and potentially signaling future rate cuts by the Federal Reserve (Fed).
Altcoins typically perform well during periods of quantitative easing (QE) and low interest rates when global liquidity increases. However, recent market trends, including a stronger dollar and reduced expectations of rate cuts, have had a negative impact on cryptocurrencies, which are considered risky assets.
Anticipating Market Reversal
He expects a reversal in the crypto markets, hoping that the current crisis will end soon. The main catalyst for this turnaround is the potential listing of the Ethereum ETF, which is likely to generate significant interest and confidence in the market.
Currently, Bitcoin is doing well, but Ethereum and many other altcoins are still far below their highest prices. He says to watch Bitcoin’s dominance and how Ethereum’s price compares to Bitcoin, as these factors could indicate whether altcoins will start to perform better.