Most altcoins suffer declines of up to 3%. Analysts see the declines as a “digestion” of last week’s losses and not a warning sign for the short term.
He cryptocurrency market continues to go through a period of volatility. Bitcoin (BTC) falls 0.3% in the last 24 hours and remains above US$111,000while Ethereum (ETH) experienced a drop close to 1.3%, recovering the US$4,000according to Binance.
Altcoins do not escape selling pressure. Binance Coin (BNB) lost 0.5% and Tron (TRX) achieved a rebound, although the market maintained its bearish tone. Ripple (XRP), Solana (SOL), Dogecoin (DOGE), Cardano (ADA), Chainlink (LINK) and Hyperliquid (HYPE) register drops that reach up to 3% in some cases.
The optimism of the sector
Despite these movements, market analysts maintain an optimistic view of the situation. Specialists interpret corrections as an “assimilation” or “digestion” of the losses suffered the previous weekwhen the reactivation of trade tensions generated massive sales.
One piece of data that reinforces the bullish narrative is the correlation between bitcoin and gold, which according to CryptoQuant reached a multi-year high of 0.9. Both assets have been moving synchronously during geopolitical shocks in recent times.
This seems to be demonstrated by institutional capital, since exchange-traded funds (ETFs) have only recorded three days with negative net flows so far this month.
Waiting for the Fed
In this sense, analysts continue to expect two interest rate cuts by the Federal Reserve (Fed) this year. This forecast seems to be supported by the latest statements by Jerome Powell, president of the Fed, who stated that The central bank was close to ending its balance sheet reduction process, that is, the sale of bond holdings that it has been carrying out since 2022..
The market interpreted these words as a “dovish” statement.which some analysts see as a kind of hidden stimulus. Reducing the Fed’s balance sheet reduces the amount of liquidity in the system, which translates into more restrictive financial conditions, similar to those generated by a rate hike.
Source: Ambito
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