Altcoins Dive as FOMC Rate Cuts Loom, But Bitcoin Eyes Soaring to $130K 🚀💰

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Key Takeaways 

Before the FOMC meeting, a risk-off mood swept through the crypto market, causing top altcoins and memecoins to plummet 3%-10%. Yet, an analyst sees a potential bullish catalyst on the horizon, thanks to upcoming inflation data and the White House crypto report. 

A few hours before the U.S. Federal Open Market Committee (FOMC) rate cuts meeting, the crypto market experienced a subtle de-risking, particularly affecting the altcoin sector. It seems the market decided to take a cautious sip of tea before the big reveal. 🍵

However, there were other macroeconomic indicators and anticipated updates that could further influence the crypto landscape this week. 

The altcoin downturn came on the heels of Bitcoin’s [BTC] dramatic plunge to $116.95k on July 29th, a moment that felt like a rollercoaster ride gone wrong. 🎢

At the time of writing, however, BTC had managed to claw its way back above $118k, but the altcoins were still in limbo, waiting for the Fed’s rate decision to provide some clarity. 

Will altcoins recover after the Fed rate decision?

In the past 24 hours, Bonk [BONK] led the sell-off parade with a 10% nosedive, while Pepe [PEPE] and Dogecoin [DOGE] trailed behind with 4% and 3% losses, respectively. 🐶🚀

Among the top layer 1 blockchains, Binance Coin [BNB] took a 3% hit, followed by Cardano [ADA] at 2.6% and Solana [SOL] at 2.2%. It was a day when even the most resilient coins felt the pinch. 💪

The overall altcoin market shed $50 billion in the past 48 hours, dropping from $1.57 trillion to $1.52 trillion. A significant loss, but perhaps a necessary evil before the storm. 🌩️

During this period, the de-risking trend also caused a slight dip in aggregated Open Interest (OI) across all exchanges and crypto assets, falling from $101 billion to $97 billion. 

Specifically, the combined OI in top altcoins (ETH, SOL, XRP, DOGE) decreased from $42.5 billion to $41 billion, indicating that some traders preferred to sit on the sidelines rather than face the expected volatility. 🧘‍♂️

Ripple [XRP] alone saw over $2 billion in OI wiped out in the past seven days, solidifying the risk-off sentiment. It’s as if the market decided to take a deep breath before the big announcement. 🫖

Next potential catalysts for alts

Despite the current gloom, Matt Mena, a crypto research strategist at asset manager 21Shares, maintained a cautiously optimistic outlook ahead of the Fed rate decision and key inflation data (PCE) expected on July 31st. 

In an email to AMBCrypto, Mena predicted that the Fed would keep interest rates steady in July, but a 25 basis point rate cut in September could ignite a BTC rally. 

“But the path beyond July is more open: the market sees a 61.6% chance of a cut in September, and odds of two cuts by year-end now sit at 42.9%.”

Regarding Thursday’s inflation data, the White House crypto report, and their potential impact, Mena added, 

“If Thursday’s PCE print comes in soft – and if the crypto policy report offers real substance – BTC could quickly reclaim $120K and push into price discovery.” 

Mena further speculated that BTC could surge to $130K and potentially reach $150K by the end of September, especially if the crypto report includes the establishment of a strategic BTC reserve. 🌠

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2025-07-31 04:14