Bitcoin resumes recovery today after us stock market overcome negative inflation figures
Today's market analysis on behalf of Samer Hasn, Senior Market Analyst at XS.com
September 12, 2024 (Investorideas.com Newswire) Bitcoin continues its gains today, rising more than 1% and reclaiming the $58,000 level after falling below $56,000 yesterday in early US trading.
Today's gains come after the US stock market overcame the negativity that flooded by the August inflation report, as core inflation accelerated more than expected.
Meanwhile, mixed CPI readings pressured the market, although they did not fundamentally change expectations for the Federal Reserve's next steps this year. It may seem that markets were looking for a surprise in the form of a further slowdown in inflation in light of the string of negative labor market data, which may explain the sharp declines initially.
However, stocks eventually took a turn and headed significantly higher, with the NASDAQ 100- a measure of risk appetite for volatile assets - closing with gains of more than 2%, which helped cryptocurrencies trim their losses.
While the crypto market is still frustrated after the harsh declines with the inability to regain. Bitcoin spot ETFs cannot record a series of positive inflows of investor funds without bleeding later for days. This week, after these ETFs recorded positive inflows of about $146 million in the first two days, yesterday they recorded negative inflows of more than $43 million.
While monetary and macro factors seem to be the primary drivers of the broader crypto market movements more than ever, especially since we are at a crossroads, either achieving a soft landing for inflation or a hard one and entering a recession.
Accordingly, the beginning of the path of cutting interest rates with the Federal Reserve talking about further easing monetary tightening in the future may be one of the key drivers for cryptocurrencies.
While markets are certain that the Fed will cut interest rates next week with an 87% probability of a quarter point cut, the complement to this percentage is in favor of a half point cut, according to the CME FedWatch Tool. This cut could extend to at least a full point by the end of the year with an 80% probability.
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