Bitcoin and Altcoins Surges looking for a Positive Week Ahead

Over the last six days, the consistent positive performance of altcoins is generating optimism and positioning Bitcoin for a potential test of $46,000, as noted by an analyst. The total cryptocurrency market capitalization has surged from $1.61 trillion to $1.74 trillion within a week, driven by the recovery of alternative cryptocurrencies (altcoins) such as Solana (SOL), Avalanche (AVAX), and Internet Computer (ICP).

Solana's SOL has experienced a notable 29% increase, reaching $105. This rise almost reverses the losses observed after the introduction of spot-based bitcoin exchange-traded funds (ETFs) on January 11 in the U.S. The rally is linked to heightened user interest in Solana-based trading aggregator Jupiter, where volumes surpassed $500 million on Monday, outpacing the activity on decentralized exchange Uniswap.

AVAX, the native token of Avalanche, a competitor to Ethereum, has witnessed a 25% rally in just one week. Additionally, tokens like ICP, NEAR, DOT, and XMR have shown gains ranging from 13% to 22%. Bitcoin (BTC), the largest cryptocurrency, has gained almost 10%, trading above the widely monitored 50-day simple moving average at $43,546. Movements above or below this level are considered indicators of strengthening bullish or bearish momentum.

Ether (ETH), the native token of Ethereum and the second-largest cryptocurrency, has only seen a marginal increase of 0.6%. This underperformance is attributed to market makers trading against the direction of the price move, curbing upside price volatility.

The positive performance of altcoins in the last six days sets the stage for optimism and a potential Bitcoin test at $46,000. However, he cautioned that Bitcoin's move above the 50-day average is important but not conclusive evidence of a bullish trend. 

Looking ahead, the U.S. Federal Reserve is scheduled to announce its rate decision on Wednesday at 19:00 UTC, followed by Chairman Jerome Powell's press conference half an hour later. Analysts anticipate the central bank to maintain the benchmark borrowing cost between 5.25% and 5.5%, with expectations of a potential rate cut in May instead of the previously anticipated March. The market is closely monitoring the Fed's tone, with a dovish shift potentially boosting risk appetite and directing more capital into Bitcoin and related ETFs.