According to a correlation study, the movements of digital assets are more synchronized with U.S. stocks than at almost any time in the past, indicating that macroeconomic variables driving the stock market are also impacting the cryptocurrency market.
Data compiled by Bloomberg shows that the 40-day correlation coefficient between the largest 100 digital assets and the S&P 500 Index is approximately 0.67, close to the 0.72 reached in the second quarter of 2022. A correlation coefficient of 1 indicates that the movements of the assets are perfectly synchronized, while -1 indicates a complete inverse relationship.
Source: Bloomberg
Last week, the U.S. Federal Reserve aggressively cut interest rates by 50 basis points, marking the beginning of an anticipated monetary easing cycle, leading U.S. stocks to reach historical highs and Bitcoin to surpass $64,000.
For various traders, the upcoming U.S. economic data is now crucial, as they seek clues regarding the potential further reduction in benchmark borrowing costs. Caroline Mauron, co-founder of digital asset derivatives trading liquidity provider Orbit Markets, stated:
“This week’s focus is on comments from Federal Reserve officials and the release of the central bank’s preferred inflation indicator—the Personal Consumption Expenditures (PCE) Index.” Sean McNulty, trading director at liquidity provider Arbelos Markets, remarked:
Source: Bloomberg
