According to Bloomberg, according to correlation research, the linkage between digital assets and the US stock market has almost reached a historical high, indicating that macroeconomic variables driving the stock market are also affecting the cryptocurrency market. According to data compiled by Bloomberg, the 40 day correlation coefficient between indicators measuring the top 100 digital assets and the S&P 500 index is approximately 0.67, a level that was only surpassed in the second quarter of 2022 when it reached 0.72. A coefficient of 1 indicates that the asset trends are completely consistent, while a coefficient of -1 indicates completely opposite.
Last week, the Federal Reserve significantly reduced interest rates by 50 basis points, ushering in the expected cycle of monetary easing. Caroline Mauron, co-founder of Orbit Markets, a liquidity provider for digital asset derivatives trading, said, "Macro factors are currently driving up cryptocurrency prices, and this trend should continue throughout the Federal Reserve's easing cycle unless we see a cryptocurrency specific black swan event
This week's focus will be on comments from Federal Reserve officials and the release of the US Personal Consumption Expenditures Price Index (PCE). We believe that speakers are more important than PCE inflation data because what the market is currently trying to understand is the response function of the Federal Open Market Committee (FOMC), "said Sean McNulty, head of trading at Arbelos Markets, a liquidity provider
