The altcoin prices have noted volatile trading over the past few days, with Ethereum, Solana XRP, and others noting declines. Meanwhile, the decline in the broader crypto market also followed a slump in Bitcoin price, sparking discussions over potential reasons behind the slump.
A flurry of macroeconomic factors and global trends could have weighed on the recent sentiment recently. So, here we take a look at the top reasons behind the recent drop in prices.
Why is Altcoins Prices Falling?
Some of the top reasons behind the recent selloff include:
Bitcoin ETF Outflow
After witnessing robust inflows for the past few weeks, the U.S. Spot Bitcoin ETF recorded an outflow of $200.4 million on Monday, June 11. This sudden reverse in trends has weighed on the broader market sentiment, which could have contributed to the recent slump in the altcoin prices.
The robust inflow into Bitcoin ETFs has so far boosted the market optimism, triggering a rally in the Bitcoin price over the past few weeks. In addition, the altcoins prices also followed suit, witnessing significant gains, before noting a decline from last week.
U.S. Job Data Triggers Altcoin Decline
Last week’s U.S. Job data came in stronger than expected, dampening hopes of the investors over a potential dovish stance by the U.S. Federal Reserve. Notably, the Federal Reserve has maintained a hawkish stance so far this year with their policy rate plans, to combat the red-hot inflation.
Having said that, the European Central Bank (ECB), which has also maintained a similar stance, announced a rate cut last week. Although anticipations for a similar move by the U.S. central bank also soared following that, the labor market data has diminished hopes, as the market awaits further economic clarity.
Also Read: FED Meeting June 2024- Why The Interest Rate Cuts Might Not Happen At All?
Inflation, FOMC, & Fed Chair’s Comment To Impact Altcoins Performance
After the gloomy economic data last week, investors are now eagerly waiting for today’s U.S. CPI inflation data, FOMC interest rate decisions, and Fed Chair Jerome Powell’s press conference. The U.S. Consumer Price Index (CPI) data will provide cues on the current inflation level in the nation, a crucial factor in deciding the future of the altcoin prices. In addition, the market will also keep a close track of tomorrow’s U.S. PPI data, for further cues on inflation.
On the other hand, the FOMC interest rate decision will play a crucial role in shaping the market performance in the coming days. Although the market is anticipating the Federal Reserve to maintain its policy rate, any other decision might impact the market. Simultaneously, Fed Chair Jerome Powell’s remark will provide insights into the potential future move of the central bank with the interest rate plans.
Considering that, the market seems to be taking a pause ahead of the crucial events, potentially causing a heightened volatile scenario in the altcoin prices.
When Will The Altcoins Prices Rebound?
The broader crypto market has witnessed volatile trading before the previous FOMC events as well this year. However, soon after the event, the overall market noted a strong recovery, wiping off the losses recorded before the event.
Considering that, the market pundits anticipate a recovery in the altcoin prices soon after the event. But despite the anticipation, it’s also worth noting that if the U.S. CPI data comes in hotter than expected, it could extend the ongoing volatility in the altcoin prices. Simultaneously, the Fed’s comment, especially if any hawkish stance is taken by the central bank, will also impact the overall market sentiment.
As of writing, Solana price was down 1.32% and traded at $152.67, while XRP price fell 0.54% from yesterday to $0.484. In the meme coins sector, Dogecoin price plunged 1.08% to $0.1405, with Shiba Inu price dropping 0.71% to $0.00002207.
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Rupam, a seasoned professional with 3 years in the financial market, has honed his skills as a meticulous research analyst and insightful journalist. He finds joy in exploring the dynamic nuances of the financial landscape. Currently working as a sub-editor at Coingape, Rupam’s expertise goes beyond conventional boundaries. His contributions encompass breaking stories, delving into AI-related developments, providing real-time crypto market updates, and presenting insightful economic news. Rupam’s journey is marked by a passion for unraveling the intricacies of finance and delivering impactful stories that resonate with a diverse audience.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
