As Bitcoin (BTC) heads the current consolidation phase in the cryptocurrency market, analysts are keenly observing the next ten days as a crucial period for both the altcoin season and a potential new market rally.
Experts at The Bull Theory, a cryptocurrency research organization, have highlighted the importance of this forthcoming timeframe, indicating it could influence the outcome of what they refer to as “mega altseason” in the fourth quarter (Q4) of this year.
Could Global Economic Data Spark A Rise In Crypto Prices?
This new prediction for the wider crypto domain comes in response to recent economic data from China, indicating signs of diminishing demand. Retail sales rose by merely 3.4% year-on-year, falling short of the anticipated 3.9%.
In a similar vein, industrial production grew by only 5.2%, marking the slowest growth rate in a year, while urban unemployment climbed to 5.3%.
These indicators point towards a cooling in the world’s second-largest economy, leading to speculation that quantitative easing (QE) might be the sole practical solution going forward.
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China has started injecting considerable liquidity into its economy, and further actions could significantly enhance the global money supply. The scenario in the United States introduces an additional layer of complexity, with markets expecting a 25 basis point reduction in the Federal Reserve’s (Fed) interest rates on September 17.
Should Fed Chair Jerome Powell confirm this cut and hint at further easing, The Bull Theory argues that this could trigger a liquidity surge. Historically, such actions have sparked rapid increases in crypto and Bitcoin prices, often ranging from 5% to 10% within weeks.
Furthermore, Ethereum (ETH) may experience increased inflows, particularly from exchange-traded funds (ETFs), while altcoins could gain from a heightened risk appetite among investors. Conversely, if the Federal Reserve is slow to implement additional cuts, risk assets may undergo a sharp correction.
Possible Rate Cuts From Major Central Banks
The coming days will also witness crucial decisions from other central banks, including the Bank of England (BOE) on September 18. If the BOE indicates a readiness to lower rates, it would bolster the narrative of coordinated global easing.
This could coincide with possible dovish actions from the Bank of Japan (BOJ) on September 19, likely further weakening the yen and allowing more dollar liquidity to flow into the market.
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Based on the firm’s analysis, the optimal scenario in the macroeconomic context would involve a synchronized global easing approach, featuring cuts from the Federal Reserve, a dovish BOJ, and a supportive BOE.
They believe this could result in significant liquidity inflows, potentially driving Bitcoin beyond the $120,000 threshold, accelerating ETF inflows into Ethereum, and encouraging stronger performance from altcoins.
The Bull Theory concludes that if global central banks harmonize their strategies towards easing, the next ten days may well signal the start of a vibrant altcoin season.
Featured image from DALL-E, chart from TradingView.com
