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Despite the poor manufacturing data in the United States, federal reserve liquidity plans and strong companies’ profits keep shares and encryption standing on his feet.
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The total market value of encryption has increased by 8.5 % since March.
The cryptocurrency traders often enlarge the need to show the “clear” encryptionseason“From the stock market, and over the past ten days, bitcoin movements within the day (BTCThe main altcoins is closely tracked with the S&P 500, even with the developments of the trade war that dominated the morale of the market.
Digital assets get rid of the authenticity of digital assets as an independent class and have increased concerns about the potential global economic stagnation. This continuous association led the market participants to question whether the cryptocurrency market is estimated to follow the progress of the stock market indefinitely, and what are the conditions necessary for a real separation.
The stock market appears strength despite trade tensions
The S&P 500 has reached its climax on February 19, and has since been fought to restore the level of 5800, which was kept for four months. Despite the constant pressure of American trade conflicts with Canada and Mexico, as well as the imposition of new definitions that affect almost every major economic zone, stocks have shown noticeable flexibility.
Chinese government media recently reported that the United States has quietly started trade negotiations. Although China officially maintains a 125 % revenge tariff for American imports, it has been granted exemptions for sectors such as ethane, semiconductors, and some medications. The United States, in turn, gave the auto companies from the new customs tariff. These procedures indicate that both sides gradually make concessions.
There is a reasonable possibility that the S&P 500 bottoms were founded at 4,835 on April 7, with the gains from the current 5635 level. The stock market responded positively to profits in the first quarter, as companies adapt to tariffs by transporting production outside China or expanding operations within the United States.
For example, Microsoft has reported an increase of 13.2 % on an annual basis in revenue, with margins and strong demand for artificial intelligence. Meta also achieved profits and revenues that exceeded the market expectations on April 30. These results have alleviated concerns about the potential artificial intelligence bubble or the risks that the trade war can force companies to reduce investment.
The market concentration is transmitted to the federal reserve
Instead of focusing on the last decline in PMI manufacturing data-which has reached its lowest level in five months in April, market participants closely monitor the following policy movements of the Federal Reserve. A year after reducing the public budget, the federal reserve is now Consider buying assets To help relieve pressure.
The increase in liquidity is usually favorable to the assets of risk. Therefore, even if no complete separation occurs, cryptocurrencies still benefit from a larger economic environment.
Despite the short -term relationship, the coded currency market has surpassed stocks in recent months. Since March, the total market value of encryption has increased by 8.5 %, while S&P 500 decreased by 5.3 %. Over a period of six months, this difference becomes more clear: the total number of the Crypto market increased by 29 %, while the S&P 500 decreased by 2 %. Therefore, it is not precisely to suggest that these markets are moving in perfect synchronization, especially when they are displayed on long time frames.
Related to: Bitcoin to a million dollars by 2029 fed by ETF and Gov’t Demand – BitWise Exec
It is still too early to announce the final bottom of the S&P 500 or to conclude that the trade war has been resolved. and Economic recession It is likely that it has negative effects of both markets. However, the current stock of stock indicates a decrease in risk hate among investors. Currently, the high connection between cryptocurrencies and stocks may be the most suitable scenario.
This article is intended for general information purposes and does not aim to be and should not be considered legal or investment advice. The opinions, ideas and opinions expressed here are alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
