The main dishes to remember:
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Despite low data on the manufacture of the United States, the liquidity plans of the federal reserve and the solid benefits of companies maintain actions and the crypto afloat.
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The total market capitalization of the crypto has increased by 8.5% since March.
Cryptocurrency merchants have frequently zoomed in the need for crypto to show a clear “decoupling” of the stock market, and in the last 10 days, the intraday movements of Bitcoin (BTC) and the main altcoins followed closely those of the S&P 500, even if the business developments have dominated the feeling of the market.
A decoupling would validate digital assets as an independent class and would respond to increasing concerns concerning a potential global economic recession. This current correlation has led the participants to the market to wonder if the cryptocurrency market is intended to follow the example of the stock market indefinitely, and what conditions would be necessary for a real decoupling to occur.
The stock market shows force despite trade tensions
The S&P 500 reached its peak on February 19 and has since had a hard time recovering the level of 5,800, support which held for four months. Despite the persistent pressure of American trade disputes with Canada and Mexico, as well as the imposition of new prices affecting almost all major economic regions, actions have shown notable resilience.
Chinese state media recently reported that the United States had discreetly initiated trade negotiations. Although China officially maintains a 125% reprisal rate on American imports, it has granted derogations for sectors such as ethane, semiconductors and certain pharmaceutical products. The United States, in turn, has partially exempt from the car manufacturers from new prices. These actions suggest that the two parties gradually make concessions.
There is a reasonable possibility that the S&P 500 established a background at 4,835 on April 7, with other gains from the current level of 5,635 remaining plausible. The stock market has responded positively to the robust benefits of the first quarter, because companies adapt to prices by moving production outside China or widening operations in the United States.
For example, Microsoft declared an increase of 13.2% of one year on the other of income, with higher margins and high demand for artificial intelligence. Meta also provided profits and income that exceeded market expectations on April 30. These results have attenuated concerns about a potential AI bubble or the risk that the trade war can force companies to reduce investments.
The objective of the market moves to the federal reserve
Rather than focusing on the recent drop in American PMI manufacturing data which reached a five -month hollow in April, market players closely monitor the next political movements of the Federal Reserve. After a year of balance sheet reduction, the Fed is currently considering asset purchases to help facilitate the sale of pressure.
An increase in liquidity is generally favorable to risk -based assets. Therefore, even if a complete decoupling does not occur, cryptocurrencies could always benefit from a more favorable macroeconomic environment.
Despite the short-term correlation, the cryptocurrency market has surpassed the actions in recent months. Since March, the total market capitalization of the crypto has increased by 8.5%, while the S&P 500 decreased by 5.3%.
Over a six -month period, this divergence becomes even more pronounced: the total market capitalization of cryptography is up 29%, while the S&P 500 is down 2%. It is therefore inaccurate to suggest that these markets move in a perfect synchrony, especially when they are seen on longer deadlines.
In relation: Bitcoin at $ 1 million by 2029 fed by ETF and Gov’t asc Bitwise
It is always premature to declare a final background for the S&P 500 or to conclude that the trade war has been resolved. An economic recession probably would have negative implications for the two markets. However, the current force of shares indicates a reduction in risk aversion among investors. For the moment, the high correlation between cryptocurrencies and actions can represent the most favorable scenario.
This article is for general information purposes and is not intended to be and must not be considered as legal or investment advice. The points of view, the thoughts and opinions expressed here are the only of the author and do not reflect or do not necessarily represent the opinions and opinions of Cointellegraph.
