Main takeout:
Despite the weakness of US manufacturing data, the Federal Reserve Bank Liquid Plan and strong corporate income reminds us of stocks and encryption.
The total market cap has increased by 8.5% since March.
Cryptocurrency traders frequently expand the need to show clear “separation” in the stock market, and in the last 10 days, the main movements of BTC (Bitcoin) and major Altcoins have closely tracked the main movements of the S & P 500, but even though the trade war development has dominated the market sentiment, It has been enlarged.
Discourse will verify digital assets in an independent class and solve more and more concerns about potential global economic recession. This continuous correlation has caused market participants to suspect whether the cryptocurrency market should follow the lead in the stock market indefinitely and the conditions necessary for a true dipper coupling.
The stock market shows strength despite trade tension
The S & P 500 reached its peak on February 19 and had difficulty in reclaiming the 5,800 level of support for four months. Despite the ongoing pressure on the US trade disputes with the United States and Mexico, stocks showed remarkable elasticity despite the imposition of new tariffs that affect almost all major economic areas.
The Chinese state media reported that the United States recently began trade negotiations. China officially maintains 125%retaliation tariffs on US imports, but allowed abandonment of sectors such as ethane, semiconductors and specific summary. The United States has partially exempted automakers from new tariffs. Such action suggests that both sides are increasingly conceded.
The S & P 500 founded the floor at 4,835 on April 7, and there is a reasonable possibility of gaining more profit of 5,635. The stock market responded positively to imports in the first quarter, as the stock market adapted to tariffs by relocating production other than China or expanding its operations in the United States.
For example, Microsoft reported an increase of 13.2%year -on -year, and the margin of artificial intelligence was high and stronger demand. Meta also provided imports and profits exceeding market expectations on April 30. These results have eased concerns about potential AI bubbles or trade wars that companies can reduce investment.
The focus of the market is to the Federal Reserve Bank
Instead of focusing on the recent decrease in US PMI manufacturing data, which has reached the lowest level in April, market participants closely monitor the next policy movement of the Federal Reserve. Following a one -year reduction in loan conjunction, the Fed is considering purchasing assets to alleviate sales pressure.
Increasing liquidity is generally advantageous for dangerous -oriented assets. Therefore, even if there is no complete separation, cryptocurrency can still benefit from the macro economic environment.
Despite the short -term correlation, the Cryptocurrency market has surpassed stocks in recent months. Since March, the total market capitalization has increased by 8.5%, while the S & P 500 has decreased 5.3%. This difference is much more noticeable for six months. The total market capitalization fell 29%and the S & P 500 fell 2%. Therefore, it is incorrect to suggest that these markets move to perfect motives, especially for longer periods of time.
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It is still premature to declare a decisive floor for the S & P 500 or to conclude that the trade war has been resolved. The economic recession will have a negative impact on both markets. However, the current strength of the stock indicates that the risk avoidance between investors is reduced. For the time being, the rising correlation between cryptocurrency and stocks can indicate the most favorable scenario.
This article is for general information purposes and should not be considered legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.