Top crypto analyst Michaël van de Poppe tweeted that altcoins could be on the verge of a major turnaround as multiple macroeconomic events take center stage today.
The Consumer Price Index (CPI) data release and the Federal Open Market Committee (FOMC) meeting, along with the Federal Reserve’s interest rate decision, are expected to have a substantial impact on the markets.
Anticipation Leads to Market Correction
The #Altcoin bottom could be in today!It’s a big event day as multiple macroeconomic events are happening.First, it will be CPI news, and later there’s the FOMC meeting and the FED interest rate decision to be made. They will have a huge impact on the markets.The markets… pic.twitter.com/VL3nnIgotx
— Michaël van de Poppe (@CryptoMichNL) June 12, 2024
In the lead-up to these events, the crypto markets have been experiencing a correction, with altcoins bearing the brunt of the negative sentiment.
This downward pressure has been further exacerbated by Roaring Kitty’s event and GameStop’s correction last week. However, today’s events may mark a turning point, similar to previous FOMC meetings where the markets bottomed out on Wednesday before embarking on a surge.
Looking back at previous FOMC events, both Bitcoin and Ethereum have demonstrated impressive rallies in the aftermath. Bitcoin has surged by more than 10%, while Ethereum has seen gains exceeding 20%. Given the similar correction leading up to today’s events, a repricing back upwards seems reasonable to expect.
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Show more +Show less – CPI Data: A Crucial Indicator for FOMC Decision-Making
The CPI data, set to be released at 14:30 PM CET, is the most important monthly data point, as the FOMC closely monitors this information (along with Thursday’s Producer Price Index) to gauge the state of inflation and determine potential interest rate cuts.
In 2024, the actual inflation rate has consistently exceeded forecasts, with April’s CPI rate coming in at 3.5% compared to the expected 3.4%, and March’s rate at 3.2% versus the anticipated 3.1%. This sticky inflation has been a key talking point for Jerome Powell, the Federal Reserve Chairman.
Key CPI Data Points to Watch
CPI M/M: The monthly change in the price of goods and services compared to the previous month. A lower-than-expected number could trigger a positive market reaction.
Core CPI Y/Y: The year-over-year change in the Core Consumer Price Index, which uses a different basket of goods than the regular CPI. Meeting expectations could lead to a positive market response.
Core CPI M/M: The monthly change in the Core Consumer Price Index. Last month’s data matched forecasts.
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FOMC Rate Decision and Fed Speech: Potential for Rate Cuts
The FOMC interest rate decision is scheduled for 20:00 PM CET, followed by the Fed Speech at 20:30 PM CET. While the European Central Bank recently announced its first rate cut since 2019, the U.S. may follow suit if the CPI data indicates weakening inflation. If the data meets or falls below expectations, the markets could experience a swift positive price response.
During the Fed Speech, investors will be keenly listening for any hints of potential rate cuts. If Jerome Powell strikes a dovish tone and suggests the possibility of rate cuts later this year, the markets are likely to react in a positive manner.
A fall in the dollar and yields, coupled with a rise in gold prices, could signal the end of the altcoin and crypto market correction.
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