Crypto: The three threats to watch closely this week

The crypto market is a rough sea where each wave of news can cause turmoil. This week, several factors are likely to shake up this sector. Investors and crypto enthusiasts must remain vigilant against three major threats: U.S. economic decisions, inflation indicators, and Bitcoin's continued dominance.

The decision of the American Federal Reserve

All eyes are on the US Federal Reserve (Fed) this week. On Wednesday, June 12, the Fed will announce its interest rate decision, an event that could have significant implications for crypto markets.

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Historically, Fed decisions heavily influence market movements, and cryptos are no exception.

The Fed is likely to keep interest rates unchanged, following the release of strong jobs data in May.

Policymakers appear inclined to keep rates in the 5.25% to 5.5% range, a stability that has lasted for seven consecutive meetings.

However, the slightest indication of a change could sow doubt and cause increased volatility in crypto markets.

Additionally, the possibility that the Fed will reduce the number of rate hikes planned for this year adds a layer of uncertainty. Investors should prepare for sudden moves, especially those involved in altcoins, which are often more volatile than Bitcoin.

Inflation indicators: CPI and PPI

Inflation indicators play a crucial role in monetary policy decisions. June 12 will see the publication of reports on the Core Consumer Price Index, a key indicator of inflation.

A rise in the CPI could prompt the Fed to adjust its interest rate policy, which would have immediate repercussions for cryptocurrencies.

The year-over-year CPI figure is expected to hold steady at 3.4%, suggesting the Fed may not change rates this week.

However, past correlations between CPI data and the Bitcoin price show that surprises in the numbers can cause significant moves. A higher than expected CPI could be bearish for the flagship crypto (Bitcoin), while a lower CPI could be bullish.

The next day, June 13, the Producer Price Index (PPI) will be published. Another important indicator of inflation is the PPI, which measures the average change in prices received by domestic producers. The cryptocurrency market's reaction to this data will be closely watched, as it provides clues about the future direction of the Fed's monetary policy.

The dominance of bitcoin and its implications for other cryptocurrencies

Finally, bitcoin's continued dominance in the crypto market is a crucial factor to watch. Bitcoin, often nicknamed digital gold, maintains a dominant position that influences the entire market.

This dominance may push away the idea of ​​an altcoin season, where alternative cryptocurrencies outperform Bitcoin.

On June 9, the crypto trader known as “ Emperor » shared his thoughts on the state of the market with his 390,000 followers on X.

According to him, the current sideways trend could continue, with little short-term volatility. However, altcoins could suffer due to bitcoin's strong dominance, discouraging significant rotation into these assets.

Investors should therefore closely monitor Bitcoin's movements. Strong Bitcoin performance can drain capital from altcoins, exacerbating their volatility. On the other hand, a weakness in Bitcoin could provide an opportunity for altcoins to shine, but this requires constant vigilance and a well-defined strategy.

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