Crypto markets have been rangebound ever since the green signal for the Bitcoin ETF arrived. Apart from a larger consolidation phase, dented investor sentiment and uncertainty in the market have hurt the digital asset share. Despite the larger sentiment, Wall Street has turned bullish on the stock market. The change in sentiment could see crypto markets rally and ascend.

Wall Street turns bullish on the stock market despite waning bets on rate cuts

According to a report by Yahoo Finance, various brokerages and financial firms have turned to a bullish narrative on the stock markets. This move comes despite concerns about a delay in rate cuts by the US Fed.

The Federal Open Market Committee previously decided to keep the federal funds rate target range at 5.25%–5.5%  during its January meeting. The decision was mostly in line with market expectations.  According to the CME FedWatch Tool, the market had priced in a nearly 96% chance of the Fed holding the rates constant.

The Federal Reserve did point out, meanwhile, that recent data seem to indicate that US economic activity has been growing steadily. While job growth has slowed since the beginning of the year, it is still substantial, and the unemployment rate has been low. The Fed’s report’s main finding was that, although it has decreased over the last year, inflation is still high.

However, the report by Yahoo Finance indicates that positive economic news should no longer be interpreted as “bad” simply because it may signal an impending increase in interest rates by the Federal Reserve. Rather, positive economic news signals that company activity is increasing, which is excellent for the stock market. And that’s typically good news for investors in the long run.

Crypto markets to flourish with sentiment boost

The sentiment of investors has always affected the value of cryptocurrencies. The Federal Reserve’s rate decisions have long been a key indicator that investors use to assess investments. Lower interest rates frequently increase the allure of assets like cryptocurrencies by devaluing government securities.

Global financial markets currently predict a rate cut to occur shortly. Resilient economic data, however, currently suggest that the economy has not yet sufficiently recovered to permit considerable rate reductions. Despite the negative connotation, the now turned positive forecast on stock and general financial markets will certainly boost investor risk appetite.

With upscaling sentiments and less volatility, crypto markets can head towards a bull run in the near term. Currently pressured, crypto prices could rally with upcoming positive events like Bitcoin halving, a potential Ethereum ETF approval, and even an upcoming earnings season.

Current market outlook and expectation

Crypto markets are largely running for a good year ahead. CoinGape previously reported that various institutions have been placing bets that prices for the OG-crypto will see an upscale in the future. This includes Bitwise’s forecast that in 2024, the price of Bitcoin will surpass $80,000. For the first half of 2024, at least, institutional investment in Bitcoin will continue to be the main focus, according to Coinbase.

Though Bitcoin is not the only cryptocurrency, but still the most widely known and circulated. A bull run in the Bitcoin prices usually sets a path for a better outlook in the larger virtual asset market.

At present, the market mood is noticeably bullish for the crypto sphere. This is given the US’s two interest rate decrease signals, the planned halving of Bitcoin in April, increased market liquidity, and evolving regulatory dynamics.

 

 

The post Crypto Markets Poised for Upturn? Wall Street’s Bullish Stock Sentiments Give Hope appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am