Cryptocurrency Market Faces Turbulence Before Fed Rate Decision

The cryptocurrency market, which witnessed a remarkable rise last week, is currently grappling with selling pressure due to the upcoming Federal Reserve (Fed) interest rate decision. With leading cryptocurrencies such as XRP, Solana (SOL), and Dogecoin (DOGE) experiencing a pullback, there is caution regarding a potential additional 15% to 20% drop in altcoins. Over the past 24 hours, a total of $240 million has been liquidated market-wide, with $176 million resulting from long positions.

Market Volatility Increases as Fed Rate Decision Looms

Bitcoin is encountering resistance at the $116,000 level, signaling potential short-term peaks. Analyst Ted Pillows has highlighted that the triple expiration in September could lead to weaknesses in US stock markets, potentially affecting the cryptocurrency market. Pillows foresees significant losses for major altcoins like XRP, SOL, and DOGE during this period.

Since the year 2000, the S&P 500 index has recorded an average return of -1.17% in the week following triple expiration. Should a similar scenario unfold, Bitcoin may witness a decline of 5% to 8%, while altcoins could experience a decrease of 15% to 20%. Hence, investors are advised to exercise caution regarding market direction during the week of the Fed interest rate announcement.

The Fed’s interest rate decision this week could enhance investor risk appetite, yet the possibility of subsequent selling pressure remains a pivotal factor shaping cryptocurrency market price movements.

Bitcoin’s Market Share and Anticipation of Altcoin Season

CoinMarketCap’s Altcoin Season Index recently surged to 72, though technical indicators suggest that a full-blown altcoin season may not commence in the short term. Bitcoin’s market share (BTC.D) is showing signs of recovery from critical support levels. Surpassing the 57.5 mark could propel Bitcoin’s market share back to 60%, potentially boosting Bitcoin’s dominance over altcoins in the short term.

Experts suggest that the real altcoin season could commence between the last quarter of this year and the first quarter of 2026. During this period, altcoins are expected to outperform Bitcoin. Presently, the market’s attention is focused on the short-term impact of the Fed’s interest rate decision.

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