Bitcoin and other crypto altcoins had a tough performance in February as trade risks rose, raising odds that inflation would soar. BTC crashed by over 13% during the month, while Ethereum plummeted by 32%.
Most altcoins plummeted, causing the total market cap to fall below $3 trillion. Here are the three main reasons why Bitcoin and altcoins like Pepe, Shiba Inu, and XRP may rebound in March.
Federal Reserve Interest Rate Cuts
The first main reason why Bitcoin and other altcoins may rebound in March is that the Federal Reserve may decide to cut interest rates in the coming months.
The odds of a Fed rate cut rose after the US published weak economic numbers, and tariff risks remained. Recent data showed consumer confidence dropped in February, while the economy is set to contract in the first quarter because of Donald Trump’s tariffs.
Analysts now expect the Fed to start cutting interest rates as early as June, earlier than they were expecting before that. The swap market has a 70% chance of a cut in June, citing tariffs, an immigration crackdown, and job cuts in the workplace.
Cryptocurrency prices tend to perform well when the Federal Reserve cuts interest rates, as observed during the Covid-19 pandemic.
READ MORE: Dogecoin Price Prediction: Top 3 Reasons to Sell DOGE
Donald Trump Crypto Summit
Bitcoin and altcoins like Shiba Inu, Pepe, and XRP will likely do well in March because of the Trump administration’s supportive policies.
The Securities and Exchange Commission (SEC) has already ended the enforcement of several lawsuits, including companies like Coinbase, Uniswap, Gemini, Robinhood, and OpenSea.
Trump will also have a crypto summit on Friday that could set the stage for establishing a strategic crypto reserve for the country. Such a move will likely boost most cryptocurrencies, especially those made in the USA.
At the same time, there are signs that the SEC will start approving crypto ETFs such as those of altcoins like XRP and Litecoin (LTC).
Crypto Fear and Greed Index and Futures Open Interest Are Falling
In March, the other catalyst for Bitcoin and other cryptocurrencies is that the crypto fear-and-greed index and futures open interest have plunged this year. The fear-and-greed index has fallen to the extreme fear zone of 22, and futures open interest in most coins has also plunged.
All these are bearish market indicators. However, these metrics are usually contrarian since cryptocurrency prices surge when the fear and greed index moves to the fear zone and when open interest bottoms.
Another reason these altcoins may rebound is because many are now highly oversold, and some have formed bullish patterns. For example, the Pepe coin price has formed a falling wedge pattern pointing to a strong surge ahead.
READ MORE: Litecoin (LTC) on the Verge of a Breakout: Is a Surge to $230 Next?
