This week will see key economic developments in the US, starting with the Federal Reserve's long-awaited interest rate decision scheduled for May 1st. Analysts predict with a 95.6% probability that the Fed will keep interest rates at current levels. In addition, on May 3, the US will publish the April unemployment rate. Expectations for a cut in US interest rates this year have dropped to one.

However, this week there were alarming data from the United States. A weaker-than-expected GDP figure suggests a slowing economy, while a stronger Core PCE reading signals ongoing inflation problems, creating problems for the Federal Reserve.

While there are concerns that the US could enter a stagflation scenario characterized by negative GDP growth and high inflation, this remains speculative at this time. Market sentiment has changed accordingly, with expectations now calling for only one interest rate cut in 2024. This is in stark contrast to initial forecasts of seven declines at the start of the year and three in March.

What's next for Bitcoin and altcoins?

In a recent market update, Bitcoin (BTC) volatility has decreased significantly, dropping from 70% to 50%. Concurrently, Ethereum (ETH)'s downside bias has widened to -13% on the outside, suggesting potential doubts about further delays in SEC approval of spot ETFs.

This development begs the question: has market sentiment changed, or is this just a short pause within a broader bullish trend? Amid this uncertainty, attention turns to a potential positive catalyst on the horizon: the start of trading in Hong Kong Bitcoin and Ethereum spot ETFs next week.

Expectations are rising as market participants view the event as a potential gateway for the influx of Asian institutional capital into the crypto space.