As of now, the price of Bitcoin stands close to $118,000, with ETH surpassing $4,100. However, for a stronger rally, easing of the persistently high-interest rates is crucial as ETF approvals loom. Unlike previous seasons, this one is distinct, already signified as different owing to the bear market experiences from the past. Will cryptocurrencies rise in this climate?
Will Cryptocurrencies Rise?
We are stepping into the inflation week, with macroeconomic trends set to influence the markets after a pause in the data flow. Market forecasts currently suggest that a rate cut is almost inevitable in September. However, any deviation in upcoming data could significantly dampen risk market appetites.
In the June CPI report, housing costs, which rose by 0.2% from the previous month, considerably contributed to the increase in inflation. Energy prices, experiencing a 1% rise, also played a role. In June’s report, tariff-based impacts began to manifest in items like household goods. The upcoming July report is expected to provide more insights into tariffs, crucial for comprehending the Fed’s interest rate reduction trajectory.
Should the CPI rise as expected or fall below expectations, cryptocurrency prices may surge. Conversely, a higher-than-anticipated rise with excessive risk signals in the report might lead to a decline.
Thursday’s Producer Price Index (PPI) will serve as a leading indicator for the new Personal Consumption Expenditures (PCE), while Friday’s July retail sales data will significantly influence the week ahead. A robust recovery was observed following a nearly 1% decline in May.
Bitcoin and Altcoins
An intriguing scenario emerges here. Strong retail sales may boost stocks, driven by robust consumer demand. Normally, cryptocurrency markets are expected to follow suit with rising U.S. exchanges. However, surprisingly strong retail data could encourage the Fed to maintain its hawkish stance, potentially curbing crypto rally. Extremely poor data may also lead to a downturn due to recession fears, making balanced outcomes crucial.
Bitcoin (BTC) 
$76,480 may face short-term declines if it fails to sustain above $118,500. Monday holds weak news flow, leaving investors somewhat on their own. Decreased trading volumes could signal an initial drop, with expected strong support between $115,800 and $116,400. Such a decline could trigger panicked altcoin selling.
For altcoins, the critical chart is ETHBTC. Should BTC sales continue while ETH remains relatively strong, liquidity could flow more daringly into altcoins, sparking significant altcoin rallies. Data points before Friday will determine the direction, and inflation figures might keep markets somewhat pressured. This pressure potentially leads to more selling, the more it pushes investors to reduce risks. For now, bulls have the upper hand.
