Altcoin prices, including Ethereum and Solana, have dropped significantly due to various economic factors and market sentiment shifts, prompting speculation on recovery timelines.

Examining the Causes Behind the Recent Altcoin Price Drop and Projected Recovery

According to CoinGape, various factors could have influenced the volatile trading in altcoin prices over the past few days. This section examines the potential causes and the timeline for recovery.

Ethereum, Solana XRP, and other altcoins have experienced a decline in value in recent days, as evidenced by their volatile trading. Concurrently, the broader crypto market experienced a decrease in response to the Bitcoin price decline, prompting speculation regarding the potential causes.

Various global trends and macroeconomic factors have influenced the recent sentiment. Therefore, we will examine the primary causes of the recent price decrease.

A few of the primary causes of the recent selloff are as follows:

Bitcoin ETF Outflow

The U.S. Spot Bitcoin ETF experienced an outflow of $200.4 million on June 11, following substantial inflows over the prior few weeks. The recent decline in altcoin prices may have been influenced by the sudden reversal of trends, impacting the broader market sentiment.

Bitcoin prices have appreciated in recent weeks due to the substantial inflow into Bitcoin ETFs, contributing to the market's optimism. Additionally, the prices of altcoins followed suit, and they experienced significant increases before declining from the previous week.

U.S. Job Data Triggers Altcoin Decline

The U.S. job data from last week exceeded expectations, diminishing investors' expectations for a prospective dovish stance by the U.S. Federal Reserve. The Federal Reserve has maintained a hawkish stance with its policy rate plans thus far this year to combat the red-hot inflation. This is particularly noteworthy.

However, the European Central Bank (ECB), which has maintained a similar posture, announced a rate cut last week. The labor market data has diminished expectations as the market awaits additional economic clarity, even though expectations for a similar move by the U.S. central bank also surged in the aftermath.

Altcoins' Performance Will Be Influenced by Inflation, FOMC, and Fed Chair's Comment

Investors enthusiastically anticipate U.S. CPI inflation data, FOMC interest rate decisions, and Fed Chair Jerome Powell's press conference following the bleak economic data released last week. The U.S. Consumer Price Index (CPI) data is a critical factor in determining the future of altcoin prices, as it will provide indications of the country's present inflation level. Furthermore, the market will closely monitor the U.S. PPI data, released tomorrow, to obtain additional insights regarding inflation.

Conversely, the market's performance in the coming days will be significantly influenced by the FOMC's interest rate decision. The market anticipates that the Federal Reserve will maintain its policy rate; however, any other decision could affect the market. Concurrently, Fed Chair Jerome Powell's statement will offer a glimpse into the central bank's potential future actions regarding its interest rate plans.

In light of this, the market is at a standstill anticipating the critical events, which could result in a more volatile scenario for altcoin prices.

When Will The Altcoins Prices Rebound?

Volatile trading has been observed in the broader crypto market before the previous FOMC events and this year. Nevertheless, the market experienced a robust recovery shortly after the event, reversing the losses accumulated before the occurrence.

In light of this, market analysts predict that altcoin prices will rebound promptly following the event. However, it is also essential to consider that the ongoing volatility in altcoin prices could be prolonged if the U.S. CPI data is higher than anticipated despite the anticipation. Concurrently, the Fed's comment will influence the overall market sentiment, mainly if the central bank adopts a hawkish posture.

At the time of this writing, the price of Solana was $152.67, down 1.32% from yesterday, and the price of XRP was $0.484, down 0.54% from yesterday. In the meme coins sector, the cost of Dogecoin decreased by 1.08% to $0.1405, while the price of Shiba Inu decreased by 0.71% to $0.00002207.

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