Bitcoin and altcoins under pressure ahead of Fed interest rate decision on May 1st

Over the weekend, the overall crypto market remained under pressure. Bitcoin price faced another 2.2% correction, dropping below $62,500. Meanwhile, the altcoin space is facing further selling pressure, with the top 10 altcoins correcting between 4-10%.

Fed interest rate decision is May 1st

There are important economic events scheduled for the United States this week, starting with the Federal Reserve's long-awaited interest rate decision scheduled for May 1st. Analysts predict a 95.6% chance that the Fed will keep interest rates at current levels. Furthermore, on May 3rd, the US will release its unemployment rate for April. Expectations for US interest rates to be cut this year have fallen to just one.

However, worrying data was released this week from the United States. Lower-than-expected GDP numbers suggest a slowing economy, while rising core PCE numbers indicate persistent inflation problems, posing a challenge for the Fed.

There are concerns that the United States may enter a stagflation scenario characterized by negative GDP growth and high inflation, but this remains speculation at this point. Market sentiment has changed accordingly, with interest rate cuts currently priced in only once in 2024. This is in sharp contrast to the initial forecast of seven at the beginning of the year and three in March.

What is the future of Bitcoin and altcoins?

In a recent market update, Bitcoin (BTC) volatility has dropped significantly, dropping from 70% to 50%. At the same time, the downside bias of Ethereum (ETH) risk reversal has intensified to -13% on the front end, hinting at potential doubts regarding further delays in approval of the Spot Ether ETF by the SEC.

This development raises the question of whether market sentiment has changed or whether this is just a temporary pause in a broader bullish trend. Amidst this uncertainty, attention has been focused on a potential positive trigger for the future, with the Hong Kong Bitcoin and Ethereum spot ETF trading starting next week.

Expectations are high as market participants eye this event as a potential gateway for Asian institutional capital to flow into the crypto space.

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Bhushan is a fintech enthusiast and has a great talent for understanding financial markets. His interests in economics and finance have drawn attention to the emerging blockchain technology and cryptocurrency market. He continuously continues his learning process and stays motivated by sharing his acquired knowledge. In his free time, he enjoys reading thriller novels and occasionally trying his hand at cooking.

The published content may include the personal opinions of the author and may be subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.