5 major cryptocurrencies facing a decision point amid the Fed's battle against inflation

Certainly, mainstream investors have shown a keen interest in the cryptocurrency space, which could potentially benefit various individual cryptocurrencies. However, it's crucial to recognize the significance of fundamentals. For blockchain assets, this often revolves around the Federal Reserve and its monetary policies.

Prior to the release of the Consumer Price Index (CPI) report, many cryptocurrencies experienced losses. This report is a key data point for the Fed's interest rate deliberations. Analysts anticipated a headline inflation rate of 3.1%, but the actual figure slightly exceeded expectations at 3.2%, according to Yahoo Finance.

As expected, cryptocurrencies saw a significant decline in their value. With shelter costs remaining high, the Fed has less incentive to swiftly reduce the benchmark interest rate.While virtual currencies are making efforts to rebound, investors should exercise caution as the market reacts to the latest developments.

Tether (USDT-USD)

As a stablecoin, Tether (USDT-USD) offers a convenient way to access cryptocurrencies as it maintains a one-to-one peg with the dollar. This allows Tether holders to swiftly capitalize on opportunities in the digital asset space without the need for time-consuming conversions from fiat currencies like dollars.

However, Tether serves a broader purpose beyond liquidity provision in blockchain transactions. Fluctuations in the value of USDT can offer insights into market sentiment. Despite trading predominantly above its dollar peg over the past week, Tether briefly fell below this threshold between Monday night and early Tuesday morning.

While this deviation may not pose a significant long-term concern, it could indicate corrective movements in the short term, especially considering the heightened interest in cryptocurrencies recently.

Solana (SOL-USD)

Despite its current ranking, Solana (SOL-USD) has demonstrated notable strength in the cryptocurrency market this week. Although it fell behind Binance Coin (BNB-USD) in market capitalization, claiming the fourth position after Tether, investors can find encouragement in its 1.5% gain over the past 24 hours, outperforming many other major cryptocurrencies.

Over the past week, Solana has appreciated by nearly 13%, with Monday and early Tuesday witnessing significant upward movements following a period of sideways consolidation during the weekend.

On Solana's Point and Figure (P&F) chart, a double top breakout pattern has emerged, suggesting potential for continued momentum. However, it's important to note that the volume does not confirm the rising price action, indicating the possibility of sideways consolidation.

Looking ahead, bullish investors will aim for the $155 level, with the strongest resistance expected around $164. Nonetheless, if positive momentum fails to materialize, Solana may experience a near-term correction towards the $143 mark.

Ethereum (ETH-USD)

Ethereum (ETH-USD), holding its ground as the perennial runner-up in the crypto market, often finds itself under the spotlight. In the past 24 hours since Tuesday morning, ETH saw a modest 1% uptick, managing to cling to the $4,000 mark. Over the preceding week, the digital currency registered a roughly 9% increase, slightly outperforming Bitcoin during the same period.

Similar to Bitcoin, Ethereum's P&F chart depicts an ascending triple top breakout pattern, indicating a surge in demand surpassing available supply. This suggests potential further upside for the decentralized asset.

However, despite the positive price action, acquisition volumes have been waning. Typically, increasing volume validates upward price movements. While this doesn't necessarily imply an imminent correction for Ethereum, short-term volatility in ETH and other major cryptos wouldn't be unexpected.

According to Barchart’s Trader’s Cheat Sheet, bullish momentum may encounter resistance around the $4,100 level, while a downturn to approximately $3,920 remains a plausible scenario if the bulls fail to maintain momentum.

Bitcoin (BTC-USD)

Undoubtedly, Bitcoin (BTC-USD) stands out as the standard-bearer in the realm of cryptocurrencies, commanding the lion's share of attention. Recently, BTC has experienced a meteoric rise, reaffirming its status as a premier investment across all asset classes. Earlier this week, Bitcoin approached the $73,000 mark, according to data from CoinMarketCap. However, as of early Tuesday morning, maintaining the $72,000 level has proven challenging, with even the $71,000 threshold appearing somewhat uncertain.

From a technical analysis standpoint, there are divergent perspectives. Analyzing a point-and-figure (P&F) chart, it seems Bitcoin has formed an ascending triple top breakout pattern. This potentially signals robust bullish sentiment, characterized by persistent demand driving the cryptocurrency towards significant milestone levels.

Conversely, immediate sentiment appears tepid. Picture a boxer entering the final rounds of a match: still in the fight, but showing signs of fatigue with slower, less impactful punches.Declining volume levels further suggest a potential period of consolidation. It's advisable to monitor this situation closely.

Cardano (ADA-USD)

Being one of the pioneer alternative cryptocurrencies, Cardano (ADA-USD) has garnered a devoted investor following over time. However, ADA has exhibited relatively weaker performance in the decentralized asset market this week. Over the past 24 hours, starting from early Tuesday, it saw a modest 1% gain before experiencing a 4% decline. Nonetheless, over the trailing week, it has managed a 2% increase.

So, what's behind this trend? It seems that bullish investors are consolidating their gains following a robust upward trend in the blockchain asset from late February to early this month. Looking ahead, two potential scenarios could unfold. Firstly, Cardano might currently be forming a bullish flag pattern, suggesting the possibility of significant upward movement.

On the flip side, there has been a decline in volume trends in recent sessions, a common characteristic in the cryptocurrency space. Consequently, downside movement could also be in the cards.

According to Barchart's cheat sheet, notable support levels are observed around 71 to 72 cents. Optimistic traders, however, will aim for the 80-cent mark, with a longer-term perspective aimed at surpassing 89 cents.

XRP (XRP-USD)

XRP (XRP-USD) emerged as a standout performer amid the surging demand in cryptocurrencies. Over the last 24 hours since early Tuesday, the coin experienced a notable gain of approximately 12% in market value, despite encountering a subsequent 6% decline. However, its performance over the past week reflects an overall increase of nearly 12%.

From a technical standpoint, XRP encountered persistent resistance from its 50-day moving average for much of the year. Whenever it breached this average, the 200 DMA served as an additional obstacle, dampening bullish momentum. Yet, on Monday, bullish sentiment prevailed as XRP surged to nearly 75 cents before experiencing a consolidation phase.

Moreover, Monday's trading session witnessed significant volume, reaching its highest level this year. Analyzing XRP's point-and-figure (P&F) chart suggests a potential return to the 75-cent mark, with a subsequent target around 88 cents.

According to Barchart's analysis, substantial resistance could be encountered at the 93-cent level. However, surpassing this threshold could ignite further speculation and drive XRP's price higher.

Avalanche (AVAX-USD)

Avalanche (AVAX-USD) has emerged as one of the standout performers among altcoins in recent times, experiencing a notable surge of approximately 18% over the past 24 hours. This surge significantly outpaces many other major cryptocurrencies over the same period. Impressively, it has recorded a remarkable return of 36% in the trailing seven days.

Monday's trading session exhibited a strong "candlestick" pattern, reflecting positive market sentiment. However, the early Tuesday morning session saw some volatility, likely influenced by global crypto investors closely monitoring the U.S. inflation report. Interestingly, despite an initial dip following the report, AVAX quickly rebounded, showcasing resilience.

Avalanche's point-and-figure (P&F) chart reveals a double top breakout pattern, indicating robust demand surpassing available supply—a bullish sign suggesting potential for a sustained upward trend. However, it remains to be seen if any investors exhibit hesitancy given the underperformance of other cryptocurrencies.

Referring to Barchart's analysis, investors will be closely monitoring support levels, particularly at $46.34. Failure to hold this support may see a decline to the next level at $45.77. Conversely, bullish momentum targets the $60 level following a breakthrough of resistance levels ranging between $50 and $54.50.