Crypto Altcoins Face 50% Correction Ahead of FOMC Meeting

The crypto market is experiencing a downturn on Tuesday, with altcoins showing signs of a potential rollover. This shift comes ahead of the Federal Reserve's FOMC meeting, which is expected to influence market sentiment. The current market conditions reflect a broader trend of uncertainty and volatility, as investors await key economic indicators and policy decisions. The Federal Reserve's actions, particularly regarding interest rates and monetary policy, are closely watched by crypto investors, as they can significantly impact the market's direction. The anticipation of the FOMC meeting has led to a cautious approach among traders, with many opting to hold off on significant moves until more clarity is provided. This cautious stance is evident in the subdued trading activity and the lack of significant price movements across various altcoins.

The combined market capitalization of all cryptocurrencies, excluding Bitcoin, is at risk of rolling over and declining further. The price is currently holding above the major $1.01 horizontal support, but an M pattern has formed, which could potentially send the price down through this support. This pattern suggests that altcoins may be on the brink of a significant correction. The weekly chart for Total 2, which represents the combined market cap of all cryptocurrencies excluding Bitcoin, shows that altcoins have corrected by almost 50% from their peak. Despite this correction, the trend line has held, and a higher low was put in, indicating that the overall trend is still upward. The Stochastic RSI at the bottom of the chart shows that the indicators are heading up nicely, suggesting a continued rally to at least the major resistance at $1.22 trillion.

Investors have turned to gold as a safe haven asset ahead of the FOMC meeting, causing the gold price to spike back towards its previous all-time high. This shift to gold indicates a short-term play, as macro indicators suggest that gold should come back down to earth over the next several weeks before potentially resuming its uptrend. In the intervening period, risk assets, including cryptocurrencies, could continue to rally. The speed at which this rally resumes depends on the statements and hints made by Jerome Powell during the upcoming FOMC meeting. The market will be closely listening to any indications of the Federal Reserve's stance on interest rates and monetary policy, which could significantly impact the direction of the crypto market.

In summary, the crypto market is currently experiencing a downturn, with altcoins showing signs of a potential rollover ahead of the Federal Reserve's FOMC meeting. The market's reaction to the FOMC meeting will be crucial in determining whether altcoins are indeed on the verge of a rollover or if the current downturn is merely a temporary setback. Investors are advised to stay informed and prepared for potential market shifts, as the crypto landscape continues to evolve in response to broader economic factors.