• Dapps:16.23K
  • Blockchains:78
  • Active users:66.47M
  • 30d volume:$303.26B
  • 30d transactions:$879.24M

Bitcoin recovers to $61,000 after S&P 500 surge

user avatar

by Giorgi Kostiuk

10 months ago


  1. Short-term drop in S&P 500 post-FOMC meeting
  2. Increased correlation between Bitcoin and stocks
  3. Bitcoin poised for Q4 gains

  4. Bitcoin's price has recovered swiftly to $61,000 over the past 12 hours after the S&P 500 reached a new all-time high. The market is bracing for volatility ahead of the Federal Open Market Committee (FOMC) meeting and rate cut announcements that will likely impact both the U.S. stock market and the cryptocurrency industry.

    Short-term drop in S&P 500 post-FOMC meeting

    The S&P 500 index is considered a key indicator to understand the trend of the overall U.S. market. In June 2024, [it was valued](https://ycharts.com/indicators/sp_500_market_cap#:~:text=S%26P%20500%20Market%20Cap%20is,37.16T%20one%20year%20ago.) at $45.84 trillion. A day before the FOMC meeting, the index reached a new all-time high of 5670. Speculation suggests traders have priced in a 0.50 basis point or 0.5% rate cut. Historically, however, whenever interest rates have been slashed, the SPX index has experienced a short-term drop most of the time. Since 1984, the Federal Reserve has cut rates 10 times, and SPX's ROI during the 1-month period following the cuts has been negative 60% of the time. The previous two rate cuts in 2019 and 2020 also triggered immediate corrections.

    Increased correlation between Bitcoin and stocks

    Bitcoin and the S&P 500 index have witnessed strong correlation over the past few years, especially during the bull market in 2021. In Q1 2024, the correlation coefficient (CC) between Bitcoin and SPX was high as both reached new yearly highs. Currently, the correlation coefficient is rising back to high levels. The current correlation between Bitcoin and SPX is 0.88. This suggests that the assets are expected to move in tandem following the FOMC meeting. If SPX experiences a drawdown, Bitcoin is likely to follow as it has not broken its multi-month downtrend. Considering a BTC correction might follow the rate cut, the immediate target range is $54,000, where a CME futures gap was formed at the beginning of September. The drawdown could be deeper due to the macroeconomic event, potentially reaching previous lows at $48,880.

    Bitcoin poised for Q4 gains

    Despite the bearish scenario, this pertains solely to the short-term frame for Bitcoin and the S&P 500. As illustrated in the previous chart, SPX has registered positive returns over 3-month, 6-month, and 12-month periods whenever the markets have not navigated through a recession, as witnessed during 1990, 2001, and 2007. [Data](https://www.franklintempleton.com/insights/anatomy-of-a-recession) from Franklin Templeton suggests that the risk of a recession remains relatively low compared to March 2024, indicating that the U.S. economy is slowly improving in terms of consumer and business activity, as well as liquidity. Therefore, if a recession can be avoided, SPX should shrug off any short-term volatility from the rate cuts and continue its bull market. This would likely present a bullish scenario for risk-on assets such as Bitcoin in Q4.

    Bitcoin's recovery to $61,000 is linked to S&P 500's record high and anticipation of the FOMC meeting results. Despite potential short-term corrections, long-term prospects remain positive if the U.S. economy avoids a recession.

0

Rewards

chest
chest
chest
chest

More rewards

Discover enhanced rewards on our social media.

Other news

Crypto Token and Residency Rights: A New Era of Digital Identity

chest

A cryptocurrency token now offers holders residency rights, expanding the capabilities of digital assets.

user avatarGiorgi Kostiuk

Arrest of Ketamelon: Major Drug Cartel Used Monero for Laundering

chest

Indian authorities arrested Edison, known as Ketamelon, in connection with a major dark web drug syndicate.

user avatarGiorgi Kostiuk

Olaxbt and Amber Group: Investments in AI Trading

chest

Olaxbt raises $3.38M from Amber Group for AI trading platform development, with no token launch implications announced.

user avatarGiorgi Kostiuk

Ethereum: Reliability and Stability for Institutions

chest

Vitalik Buterin highlights that Ethereum's reliability attracts institutional investors.

user avatarGiorgi Kostiuk

Overview of Most Popular Cryptocurrencies: BlockDAG, Toncoin, Hedera, and Litecoin

chest

This week, the focus is on cryptocurrencies with real applications and strong technologies. Overview of four key assets.

user avatarGiorgi Kostiuk

80,000 BTC Migration by Ancient Whale: What It Means for Bitcoin Market?

chest

The migration of 80,000 BTC by an ancient whale raises concerns, yet no signs of market selling pressure are observed.

user avatarGiorgi Kostiuk
dapp expert logo
© 2020-2025. DappExpert. All rights reserved.
© 2020-2025. DappExpert. All rights reserved.

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.