- Despite stock market downturn, Bitcoin maintains upward momentum, defying broader market trends.
- High inflation rates prompt Fed rate cut speculation, impacting market sentiment.
- Analysts foresee adjustment in rate cut projections for 2024, with minimal impact on crypto market anticipated.
In the face of a broader market downturn triggered by hotter-than-expected U.S. inflation data, Bitcoin continues its ascent, undeterred by the negative sentiment affecting stocks. Despite major equities slipping, the leading cryptocurrency sustains its upward trajectory, showcasing resilience amidst market volatility.
Bullish Momentum Prevails
Bitcoin, often considered a hedge against inflation, remains buoyant with a 3% increase over the past 24 hours, reaching $72,781 as of 12:32 p.m. ET. Analysts attribute this resilience to the prevailing bullish momentum within the crypto market.
Aurélie Barthere, a Principle Research Analyst at Nansen, believes that the current CPI data is unlikely to halt the crypto bull market or significantly impact prices in the near future.
Stocks Retreat, Bitcoin Rallies
While Bitcoin marches higher, major stock indices experience slight declines. The S&P 500 and the Nasdaq Composite are down by 0.12% and 0.6%, respectively. Notably, shares of tech giants like Nvidia, Meta, and Apple witness declines.
This is reflecting the broader market sentiment affected by concerns over inflation and potential Fed rate adjustments.
Inflation Data Implications
February’s U.S. CPI report, revealing persistently high inflation rates, prompts concerns about the Federal Reserve’s stance on interest rates. The market digests this data cautiously, with interest rate traders anticipating a hold on rates in March and May, followed by a possible cut in June.
However, uncertainties linger, as over 35% of traders still expect a rate pause in June, highlighting diverging opinions on future monetary policy.
Barthere predicts a recalibration of rate cut expectations for 2024. Future markets are likely reducing the number of projected cuts from four to two or three by the year’s end. Despite this adjustment, she anticipates minimal impact on the crypto market.
It is further emphasizing that similar repricings have occurred without jeopardizing the overarching bull market narrative.
Cryptocurrency Market Resilience
The GM 30 Index, representing a basket of the top 30 cryptocurrencies, reflects the overall resilience of the crypto market, witnessing a 3.02% increase to 159.46 in the past 24 hours. This uptrend underscores the continued investor confidence in digital assets, even amid broader economic uncertainties.
As Bitcoin defies conventional market trends, its resilience underscores its growing prominence as a distinct asset class, capable of weathering macroeconomic storms.
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