Why Q4 Could Be Altcoins’ Turn as Fed Policy Shifts

Analyst Michael Van De Poppe has suggested that a number of altcoins are likely to outperform Bitcoin in the fourth quarter of this year, driven by favorable macroeconomic conditions and a potential Federal Reserve rate cut. Van De Poppe, a well-respected voice in the crypto analysis community, outlined these predictions in an interview with BeInCrypto, emphasizing the structural differences in this market cycle compared to previous years. The analyst noted that, historically, September has been a weak period for both Bitcoin and altcoins. However, this year’s dynamics could deviate from the norm due to anticipated monetary expansion and the Federal Reserve’s expected reduction in interest rates. The Fed is projected to cut rates by 25 basis points during its upcoming FOMC meeting, bringing the federal funds rate down to the 4.00–4.25% range. According to the CME Group’s FedWatch tool, the probability of this rate cut stands at 88%. A reduction in rates is likely to improve liquidity in financial markets, making high-risk assets like cryptocurrencies more attractive to investors. Van De Poppe pointed to Ethereum and other altcoins as potential beneficiaries of this shift. He argued that Ethereum, as the first mover in the altcoin space, could lead the broader market higher as rate cuts and monetary expansion take effect. This dynamic would mirror similar periods in the past, such as Q4 2019 and Q1 2020, when rate cuts coincided with crypto market rallies. In addition to macroeconomic tailwinds, altcoins are also facing challenges from $10 billion in token unlocks expected in September. These unlocks typically create downward pressure by increasing supply in the market. However, Van De Poppe noted that many of these tokens are being rolled over into off-chain trading contracts, effectively mitigating the impact. He suggested that altcoins without unlocks would likely outperform those that are affected, making strategic selection crucial for investors. The sectors expected to lead the next wave of altcoin growth include DeFi (decentralized finance), DePIN (decentralized physical infrastructure networks), and the broader Ethereum ecosystem. Chainlink, one of the leading DeFi tokens, has already shown signs of strength, with its price rising 5% in the past 24 hours. Van De Poppe highlighted Chainlink’s potential to continue this upward trajectory if it can maintain its recent momentum and hold the $23.40 support level. The technical outlook for Chainlink remains positive, with the Parabolic SAR indicator shifting downward, suggesting a developing uptrend. If the token can break through its current resistance at $25.81, it could see further gains in the coming months. However, broader market risks could still hinder its progress, particularly if Bitcoin continues to dominate liquidity in the sector. Overall, Van De Poppe’s analysis points to a potentially bullish Q4 for altcoins, especially for those positioned in high-growth areas like DeFi and Ethereum-based projects. As the Fed prepares to make its rate decision, investors will be watching closely for any signals that could confirm or challenge these expectations. The next few weeks could prove to be a turning point for the altcoin market, as macroeconomic conditions and investor sentiment align to either catalyze a new bull run or reinforce Bitcoin’s dominance in the sector.