The cryptocurrency market, which showed a strong performance last week, now faces downward pressures due to the forthcoming interest rate decision by the Federal Reserve. With a downturn in prices of key digital currencies like XRP, Solana (SOL), and Dogecoin (DOGE), there is a looming fear of a further slump ranging from 15% to 20% in altcoins. Over the recent 24-hour window, a staggering total of $240 million has been liquidated, with long positions accounting for $176 million of this figure.
Will the Fed’s Decision Stir Market Volatility?
Market analysts are closely watching Bitcoin as it struggles against resistance at the $116,000 level, a development that could hint at imminent short-term peaks. Analyst Ted Pillows warns that the triple expiration event in September might result in weaknesses spilling over from US stock markets into the crypto sector. According to Pillows, prominent altcoins such as XRP, SOL, and DOGE are vulnerable to major losses in this scenario.
Since the start of the century, the S&P 500 has typically recorded a -1.17% return in the week after triple expiration. If history repeats itself, Bitcoin could see a 5% to 8% drop, with altcoins plunging further, up to 20%. This necessitates cautious navigation for investors, particularly with the Fed’s interest rate announcement on the horizon.
The Fed’s rate decision could spark investor risk appetite, but selling pressure remains critical in molding crypto price trends.
Can Bitcoin Regain Market Share?
The Altcoin Season Index from CoinMarketCap recently climbed to 72, although technical signals cast doubt on the onset of a near-term altcoin season. Bitcoin’s market share shows signs of rebounding from crucial support, and breakthroughs past 57.5 might push it back to around 60%, reasserting Bitcoin’s dominance temporarily over other altcoins.
Experts predict a genuine altcoin season may unfold between late this year and early 2026, with altcoins outperforming Bitcoin during this time. Currently, all eyes are fixed on how the Fed’s forthcoming interest decision will ripple through the market.
In the face of the expected decision by the Federal Reserve, notable market developments include:
- Bitcoin encountering sustained resistance.
- A record liquidation of long positions valued at $176 million.
- The persistent volatility linked to the Federal Reserve’s movements.
- Potential for Bitcoin to secure a stronger market share temporarily.
As the Federal Reserve prepares to make its decision, market participants remain vigilant, assessing how these developments might influence their next moves in the dynamic world of cryptocurrency. The upcoming days promise to be a crucial period for gauging longer-term trends in both Bitcoin and the altcoin sphere.
