When the financial markets go risk-on, crypto surges
Bitcoin is up 9% over the past seven days as the financial markets see renewed risk appetite. On Saturday, bitcoin briefly hit its highest level since the beginning of June at ~$24,500 but has since stabilized at $23k.
Aug 1st 2022
The crypto market sentiment is improving, and market participants are more comfortable getting altcoin exposure. As usual during such shifts towards increased risk, ETH and BNB outperformed BTC with 12% and 16% gains over the past seven days.
The recent crypto market rally is mainly driven by increased macro-optimism. Last week’s FOMC meeting ended with the Fed hiking its funds rate by 75bps. The stock market rallied following the meeting as the market perceived the Fed as increasingly likely to start cutting rates earlier than initially expected. Over the past seven days, the S&P 500 climbed 5% and Nasdaq by 6%. Bitcoin’s 9% increase is then expected, given its high correlation with the stock market.