Altcoins
Analyst Predicts Biggest Altcoin Market Rally to $4 Trillion Market Cap
Recent data released in the US has given a visible boost to the market, also supported by dovish policy. Federal Reserve and rapid rate adjustment (QRA). Employment data released Friday showed weaker than expected figures, with non-farm payrolls posting a net creation of 175,000 jobs compared to 240,000 expected.
THE Unemployment rate also rose slightly to 3.9%, compared to the forecasted 3.8%, while the average month-on-month hourly wage rose only 0.2%, less than the 0.3 % expected. These figures indicate that inflationary concerns have been eased, thereby shaping future monetary policy.
The influence of the Federal Reserve on financial markets
At the same time, dovish stances from the Federal Reserve and Treasury led to a dramatic reversal in interest rate expectations, bringing US 2-year yields down from above 5% to nearly 4.7%. This significant drop in yields therefore raises doubts about the US Dollar rally dynamics that the market has recently witnessed.
As investors adjust their outlook for rate cuts in the coming year, the money market appears more accommodative to dollar weakness.
Response from the cryptocurrency market
The cryptocurrency market has reacted positively to the financial market in general. As a result, Bitcoin spot exchange-traded funds (ETFs) saw significant net inflows totaling $378.3 million. The renewed interest was highlighted by the Grayscale Bitcoin Trust (GBTC), which recorded a positive collection for the first time in this context.
The enthusiasm in the cryptocurrency sector is therefore partly due to the general economic situation, which now supports riskier assets such as cryptocurrencies.
Perspectives on Retail Investors and Altcoins
With the latest market dynamics, retail investors have mostly stayed away from the markets, especially the cryptocurrency markets, even though Bitcoin is about to reach its all-time high (ATH). The return of these investors is expected to occur as the altcoin market approaches the recovery, which is expected to take place after the summer.
In the past, retail investors returned to the market as altcoins – lesser-known cryptocurrencies – have started to rise in value, indicating a possible ripple effect in the crypto market. This trend also suggests that there will still be early birds for those looking to enter the market ahead of broader market participation. According to forecasts, after the summer there will be a significant influx of altcoin investments, which could lead to the descent of the “altseason”.
Additionally, the altcoin market cap demonstrates a technical formation that could represent a big move in the near future. The Formation of an Inverted Head and Shoulders Pattern in the Total Altcoin market capitalization indicates a potential breakout that could push the market cap to $4 trillion, analysts say.
As a result, this scenario, which is expected to unfold over the coming months, portends substantial growth potential in the altcoin market, which could once again attract significant interest from retail investors.
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