Key Takeaways:
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Despite the weak US manufacturing data, Federal Reserve Liquidity plans and strong corporate income maintain equality and crypto.
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The total capitalization of the crypto market has increased by 8.5% since March.
Cryptocurrency entrepreneurs often have been in need for crypto to show a clear “Decoupling“From the stock market, and in the past 10 days, the intraday movements of Bitcoin (Btc) And the major altcoins closely monitor the S&P 500, even though the development of the trade war led the market feelings.
A decay will prove digital assets as an independent class and meet growing concerns about a potential economic backwardness. This ongoing relationship has led to market participants to ask if the cryptocurrency market is reserved to follow the stock market lead forever, and what conditions are required for a real decay to occur.
Stock Market shows strength despite trading tensions
The S&P 500 reached its climax in February. Despite the ongoing pressure from US trade disputes in Canada and Mexico, as well as the imposition of new tariffs that affect almost every major region of the economy, the equals have shown noticeable stability.
The Chinese state media has recently reported that the United States has silently started trade negotiations. Although China officially maintains a 125% tariff revenge on US imports, it has given apostasy for sectors such as Ethane, Semiconductors, and some pharmacists. The United States, in turn, has partially exempted automakers from new tariffs. These actions suggest that both sides gradually make concessions.
There is a reasonable possibility that the S&P 500 established a bottom to 4,835 on April 7, with additional acquisitions from the current level of 5,635 remaining possible. The stock market positively responds to stable first-quarter earnings, as companies fit the tariffs by moving production outside China or expanding operations within the United States.
For example, Microsoft reported a 13.2% year-to-year income increase, with higher margins and strong demand for artificial intelligence. Meta also provides revenues and revenues that exceed market expectations on April 30. These results ease concerns about a potential AI bubble or the risk that trade war can force companies to reduce investment.
The market focus is moving to the Federal Reserve
Instead of concentrating on the recent denial of US-PM-manufacturing data-which reached a five-month low in April, market participants closely monitor the next moveral reserve policy policy. Following a year of reducing sheet balance, the Fed is now Considering asset purchases To help easily sell pressure.
An increase of liquidity is usually favorable for risk-focused assets. Therefore, even if a full decay does not occur, cryptocurrencies can still benefit from a more supportive macroeconomic environment.
Despite short -term relationships, the cryptocurrency market has outperformed equities in recent months. Since March, the total capitalization of the crypto market increased by 8.5%, while the S&P 500 declined by 5.3%. During a six-month period, this variation becomes more pronounced: the total crypto market cover reaches 29%, while the S&P 500 drops 2%. Therefore it is not accurately suggested that these markets move into perfect synchrony, especially if viewed in longer hours.
Related: Bitcoin up to $ 1M by 2029 -FUEL of ETF and Gov’t Demand – Bitwise Exec
Earlier to declare a certain bottom for the S&P 500 or to conclude that the trade war was resolved. An Upside down economy may have negative implications for both markets. However, the current strength in equality -equivalent indicates reduced risk of investors. Today, the elevated relationship between cryptocurrencies and stocks can represent the most desired scenario.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
