- In the current financial environment, experts suggest that the Federal Open Market Committee (FOMC) is inclined to maintain stable interest rates.
- Unlike the rising stock market, Bitcoin’s performance continues to remain moderate. BTC is currently priced below $41,800.
- If interest rate cuts coincide with the block reward halving program, significant gains are expected for Bitcoin.
As the S&P 500 achieves a new record, the Bitcoin price has started to slow down: Can the Fed’s interest moves revive Bitcoin?
SP500 Hits a New Record While Bitcoin Slows Down
In the current financial environment, experts suggest that the Federal Open Market Committee (FOMC) is inclined to maintain stable interest rates. The meeting is scheduled for January 30 and 31. It is reported that the Fed is maintaining the status quo due to better-than-expected recent economic data.
Bloomberg analysts state that the focus is currently on the FOMC’s meeting in March and beyond, expecting any policy easing to only begin after that date. Meanwhile, Wall Street completed a positive week with the S&P 500 reaching a record level on Friday. This rise, particularly prominent in technology companies, pushed the main economic measure of the United States, as noted by FT, beyond its previous peak in January 2022.
Unlike the rising stock market, Bitcoin’s performance continues to remain moderate. BTC is currently priced below $41,800. According to data, the 24-hour trading volume is $7.267 billion. This calm reaction in the cryptocurrency market is currently pushed aside by some economic market optimism. However, the key word here is ‘some’ because some analysts believe this is just early optimism before the disclosure of quarter-end results. However, the market is expected to remain optimistic.
Kevin Davitt, the head of options content at Nasdaq, stated that there is a relatively high correlation between Bitcoin and NDX (0.805). However, he mentioned that there are times when this correlation weakens, offering investment opportunities in Bitcoin and other funds. Therefore, the stock market alone is not an indicator of Bitcoin’s direction.
Bitcoin price movements are calm
In an analysis where Pantera Capital mentions that crypto bull cycles generally have two stages, it states that the first stage is a period where Bitcoin outperforms the altcoin market, and the second stage is now coming. The second stage includes a period where investors seek higher-growth tokens that outperform Bitcoin based on innovations.
If interest rate cuts coincide with the block reward halving program, significant gains are expected for Bitcoin. However, Bitcoin dominance, which was nearly 55% last week, has dropped. According to TradingView, it is currently at 51%. If investors increasingly turn to altcoins, the market can see broader growth, but this may cause Bitcoin to remain within a range.
Considering these patterns and current macroeconomic sentiments, it is likely that Bitcoin will continue to be in a phase of stable price movements in the coming weeks. However, currently, due to the high confidence in the imminent approval of Bitcoin ETFs, market confidence is high.
