At times, it seems like the cryptocurrency market is basically a pack of wolves or a school of fish -- a collection of individuals moving in concert, in reaction to an event. This week was one of those times, with positive macroeconomic developments encouraging the crowd to move higher. A score of altcoins notched double-digit gains over the week. Investors didn't seem to discriminate as to the type of coin or function.

As a result, cryptos as diverse as meme coin Shiba Inu (CRYPTO: SHIB) and smart contract platform Cardano (CRYPTO: ADA) zoomed skyward, with the former rising by almost 12% and the latter gaining nearly 17%, according to data provided by S&P Global Market Intelligence. Litecoin (CRYPTO: LTC) and Filecoin (CRYPTO: FIL) were also in the double-digit club, with respective increases of 12% and 11%.

Inflation melting away?

That's the sort of reaction that occurs when very favorable economic news hits the headlines. Crypto investors were excited about the very positive data from the federal government's Bureau of Labor Statistics handed down on Thursday. For June, the consumer price index (CPI), essentially a "basket" of prices, fell by 0.1% from May, thanks in no small part to notable declines in gasoline and other energy costs.

"Core" CPI, which strips out often-volatile food and energy prices, rose by 0.1%. Zooming out some, core CPI rose 3.3% on a year-over-year basis in June.

All of these figures were notably lower than most economists had predicted. More importantly, they suggest that inflation -- that 300-pound beast pounding economic sentiment this decade -- could be in serious retreat.

If inflation goes down, the chances for the Federal Reserve to cut its key interest rates go up. After all, the reason the Fed started hiking the rate several years ago was to dampen inflation. Fed officials have indicated a desire to cut rates, and with this new readout they have a solid reason for doing so.

Lower rates are the dream of crypto investors because, all things being equal, they encourage the market to buy riskier financial assets. As most altcoins are volatile at the best of times, they fall squarely into the higher-risk categories.

Hold 'em if you've got 'em

Because this rally is almost entirely based on recent developments, personally I wouldn't expect it to last very long.

Still, the positive sentiment on cryptocurrencies and other risky plays should linger, so this is a fine time for those who already have altcoins in their portfolio to hold on to what they've got, or even top them off to some degree. Such assets could see a nice pop if and when the Fed takes out its pair of scissors -- which is an increasingly likely possibility.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cardano. The Motley Fool has a disclosure policy.

Why Altcoins Like Cardano and Shiba Inu Rocketed Higher This Week was originally published by The Motley Fool