Hopes for a rally persist despite altcoin plunge

Son Min

Summary

It reported that altcoins recently showed declines of 7% for Ethereum, 2% for Solana, and 7% for Ripple.
The market said that, against the backdrop of the possibility of a U.S. Federal Reserve (Fed) rate cut in September, a bullish market for altcoins is expected.
On-chain data and CME open interest hit record highs, indicating that liquidity and interest in the altcoin market are surging.

Crypto Now

Ethereum down 7% over the week

Solana·Ripple also down 2, 7%

"If U.S. rate cuts in September, funds will flow in"

Despite the recent decline in altcoins, forecasts that a rally will arrive are gaining traction. This is as expectations grow for a rate cut by the U.S. central bank (Fed). According to the crypto market tracking site CoinMarketCap on the 31st, Ethereum, a leading altcoin, traded at 4445 dollars, down 7% over the past week. Solana and Ripple also fell 2% and 7%, respectively, over the same period.

However, the market still expects a bullish phase for altcoins. The main background is the possibility of a Fed rate cut in September. According to FedWatch, the probability that the Federal Reserve will cut rates by 0.25% percentage point in September is 86%. The U.S. personal consumption expenditures (PCE) price index for July, released on the 29th, also matched expectations (2.6%), increasing the possibility of a rate cut. U.S. President Donald Trump dismissing Fed Governor Lisa Cook, bringing him one step closer to gaining control over Fed decision-making, also had an impact.

Coinbase said in a report, "With a Fed rate cut expected in September, capital inflows into risk assets are likely to expand," and added, "an alt season could begin in earnest." Crypto analyst Kevin Svenson also said, "If the Fed cuts rates, prices of altcoins including Ethereum will surge rapidly."

Investors are also paying attention to a market rebound. According to on-chain analytics firm Glassnode, the open interest (OI) in perpetual futures for altcoins was about 61.7 billion dollars on the 25th, marking a record high. On the 28th, the Chicago Mercantile Exchange (CME) also saw the open interest for Ethereum, Solana, and Ripple each hit record highs. This means liquidity and attention are rapidly pouring into the altcoin market. Merlijn Mertens, a crypto analyst, argued, "Market liquidity is currently moving from Bitcoin to altcoins," and "if this flow is ignored, investors will ultimately be forced to chase the rally late."

Son Min, Bloomingbit reporter sonmin@bloomingbit.io