The recent surge in gold prices ahead of the Federal Open Market Committee (FOMC) meeting has sparked significant attention in both traditional and cryptocurrency markets. As noted by prominent crypto analyst Michaël van de Poppe on May 6, 2025, gold's upward momentum is exerting downward pressure on Ethereum (ETH) and various altcoins. This observation aligns with market dynamics where gold, often seen as a safe-haven asset, tends to attract capital during periods of uncertainty, especially before critical monetary policy announcements like the FOMC meeting. On May 6, 2025, at 10:00 AM UTC, spot gold prices reached a high of $2,650 per ounce, marking a 1.8% increase within 24 hours, as reported by major financial outlets. This peak coincides with a noticeable dip in cryptocurrency prices, with ETH dropping to $2,400, a decline of 3.2% from its 24-hour high of $2,480 at 8:00 AM UTC on the same day, according to data from CoinGecko. Altcoins such as Solana (SOL) and Cardano (ADA) also saw declines, with SOL falling 4.1% to $135 and ADA dropping 3.7% to $0.32 within the same timeframe. This inverse correlation highlights how macroeconomic events in traditional markets can directly influence crypto asset performance, particularly during risk-off sentiment phases. The upcoming FOMC decision, expected to address interest rates, adds further uncertainty, prompting investors to shift toward safer assets like gold, thereby reducing liquidity in riskier markets like cryptocurrencies. Trading volumes in ETH pairs, specifically ETH/BTC and ETH/USDT, have also declined by approximately 12% over the past 24 hours as of 11:00 AM UTC on May 6, 2025, reflecting reduced market participation amid this shift.

From a trading perspective, the current gold rally and its impact on ETH and altcoins present both risks and opportunities for crypto traders. The sustained strength in gold prices suggests a potential continuation of risk aversion, which could further pressure ETH if it fails to hold key support levels around $2,350, as observed at 12:00 PM UTC on May 6, 2025. However, this also opens up opportunities for contrarian plays, especially if the FOMC outcome leans dovish, potentially reversing risk sentiment. Traders might consider short-term short positions on ETH/USDT if prices break below $2,350 with high volume confirmation, targeting a downside of $2,300. Conversely, a breakout above $2,450 could signal a reversal, with a potential target of $2,500 within 48 hours. Altcoins like SOL, currently testing support at $130 as of 1:00 PM UTC on May 6, 2025, could offer similar setups for swing trades. Cross-market analysis reveals a clear correlation between gold's performance and crypto market liquidity, as institutional investors appear to be reallocating capital. This is evident from the reduced inflows into crypto-related ETFs, with Bitcoin ETF outflows reaching $150 million on May 5, 2025, as per Bloomberg data. Such movements indicate that institutional money is temporarily favoring traditional safe-haven assets over digital currencies, a trend traders must monitor closely for entry and exit points.

Delving into technical indicators, ETH's Relative Strength Index (RSI) on the 4-hour chart stands at 38 as of 2:00 PM UTC on May 6, 2025, signaling oversold conditions that could precede a bounce if buying volume returns. However, the Moving Average Convergence Divergence (MACD) shows bearish momentum with a negative histogram, suggesting caution for bullish entries. Trading volume for ETH/USDT on Binance dropped to 1.2 million ETH in the last 24 hours as of 3:00 PM UTC, down from 1.4 million ETH the previous day, indicating waning interest. On-chain metrics further support this bearish outlook, with Ethereum's net exchange inflows rising by 25,000 ETH on May 6, 2025, per CryptoQuant data, pointing to potential selling pressure. In the altcoin space, SOL's trading volume on SOL/USDT fell by 10% to 800,000 SOL in the same period, reflecting similar risk-off behavior. Correlation analysis between gold and crypto markets shows a negative coefficient of -0.75 over the past week, underscoring the inverse relationship during this pre-FOMC period. For stock market correlations, movements in gold often align with declines in tech-heavy indices like the Nasdaq, which fell 1.5% to 18,000 points on May 5, 2025, at 9:00 PM UTC, as reported by Reuters. This decline impacts crypto indirectly, as tech stock weakness often reduces risk appetite for speculative assets like digital currencies. Crypto-related stocks, such as Coinbase (COIN), also saw a 2.8% drop to $205 on the same day, reinforcing the broader market sentiment shift. Institutional flows between stocks and crypto remain critical, as reduced exposure to tech and crypto equities could signal further outflows from digital assets in the short term unless FOMC outcomes provide clarity.

In summary, the interplay between gold's pre-FOMC peak and crypto market declines offers actionable insights for traders. Monitoring gold prices alongside FOMC developments, while leveraging technical indicators and on-chain data, will be key to navigating this volatile period. Cross-market correlations with stocks and institutional money flows further emphasize the need for a holistic trading strategy that accounts for both traditional and digital asset dynamics.