Last week, the altcoin sector saw notable growth, including Ethereum, which surged over 20%. This upswing occurred amidst various macroeconomic changes.
Macro Economic Factors Driving Growth
The Federal Reserve's meeting on May 7 failed to cut rates, yet concerns arose about tariffs in the U.S. impacting inflation and unemployment. Economic analyst Michael van de Poppe asserts that if unemployment exceeds 5%, the Fed may be forced to lower interest rates to stimulate the economy.
However, he notes that the true catalyst for these changes originates from China. Earlier this week, China's central bank cut interest rates to a record low of 1.3% and eased reserve requirements for banks, aimed at stimulating lending and economic growth.
New Bull Market or Local Top?
Some traders believe Bitcoin has peaked, while van de Poppe argues that a new market cycle is only beginning. He points out that Bitcoin reached $69,000 in 2021 with rates at 1%. Currently, it stands at $100,000 with rates above 4%. Considering a Bitcoin ETF and potential rate cuts, cryptocurrencies have upwards potential.
When compared to gold, Bitcoin remains 30% below its previous all-time high, indicating possible further growth.
Should You Sell Altcoins?
Van de Poppe cautions against selling altcoins too early. While Ethereum has made a noticeable move, he believes this is still a minor breakout, and the altcoin market may just be warming up. He notes the typical market split among traders: some assert, "This is the start of the bull run,” while others claim, “This is just a relief rally, expect more downside." He warns that if group one is correct, group two will likely miss out entirely, as altcoin surges tend to occur quickly.
He also highlights real-world adoption signals as bullish confirmation, citing the integration of Ethereum-based stablecoin payments into Stripe just a day after Ethereum’s upgrade—a clear indication of maturing crypto infrastructure.
Michael van de Poppe believes cryptocurrencies are emerging from their longest bear cycle and entering a two-year bull phase, driven by global stimuli and technology adoption. He states, "This is the time to be bullish."
