Crypto assets pulling a 180 after Fed’s relief package over banking crisis.

The ripple effect of the ongoing collapse in the US banking sector is expected to trigger a panic selling if Tuesday’s CPI reading in the United States comes in hotter than expected.

ApeCoin and dYdX are two altcoins that are likely to face a massive selloff this week. Things are getting so risky as the US Fed moved to cover Silicon Valley Bank putting the US regulators in the spotlight. This week is important due to a few things happening in the macroeconomic landscape.

To be fair, the whole FUD started with the US Securities and Exchange Commission went after US-based stablecoin issuer Paxos. Following this was the collapse of Silvergate bank after an en-masse exodus of the company’s crypto customers decided to just up and leave.

Following the collapse of Silvergate was Silicon Valley Bank, the fallout from which was widespread. It also caused US-based USDC Stablecoin issuer Circle to have $3.3 billion in cash reserves stuck at the bank. Soon thereafter, Federal Deposit Insurance Corporation (FDIC) issued a statement to shut down Signature Bank, stating systemic risks.

Interestingly enough, Bitcoin price dropped 10% between March 9 and 10 but recovered all the losses in the next two days. Bitcoin is trading at $24317.00 at the time of writing, up +9.62%.

The Fed seems to have placed a backstop and assured the customers a full recovery of the funds stuck in these banks. This development has caused crypto markets to prevent a further collapse and instead undid the losses witnessed over the weekend.

While the short-term spike may seem enticing, investors need to note the United States Consumer Price Index (CPI) is set to be released on March 14. In his recent testimony, Fed Chairman Jerome Powell noted that curbing inflation was much harder than previously anticipated. Higher-than-expected CPI numbers could trigger a rally for US Dollar, causing the risk-on assets to collapse.

So, market participants need to wait before getting on board the hype train. With the markets in uncertain conditions, altcoins provided a respite for traders due to their inherent volatility. This week, two major cryptocurrencies will be unlocking their tokens – Decentralized exchange dYdX and ApeCoin on March 14 and March 17, respectively.