The cryptocurrency market remains in the green zone, having shown significant growth in recent weeks. The general mood in the market is changing as Bitcoin, Ethereum and the other 10 largest altcoins regain previously lost territory.
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The likelihood of a continued bullish momentum appears to be increasing as macroeconomic factors affecting asset risk soften in the short term. The US Federal Reserve (Fed) has begun a period of no contact with the media, and dollar inflation looks set to ease.
This indicator, measured by the consumer price index (CPI), is at a 40-year high and, according to data provided by the Bank of America, will fall sharply in the July publication. The banking institution conducted a market research and determined investors ‘really expect inflation to come down’ over the next two years.
In addition, according to economist Alex Krueger, US stocks are trending higher due to “surprisingly strong” technical performance. The Nasdaq 100 and S&P 500 have both broken long ascending triangles, suggesting a recovery of previous highs.
The Nasdaq 100 is currently trading at 12,343, marking a significant gain since early July. Krueger believes that this index could return to April 2022 levels, which would represent an important bullish trend. Economist said via Twitter:
With no surprises from the Fed before the September FOMC meeting (expecting July to be a non-event) and with no major negative developments on the European front, the summer rally that lifted prices there makes sense to me.
These three factors, the absence of the Fed, the potential decline in inflation and the growth of US stocks, represent the best-case scenario in the current macroeconomic conditions. The cryptocurrency market shows a high correlation with the Nasdaq 100 and could benefit from a summer rally.
Bitcoin, Ethereum and other cryptocurrencies are already breaking critical resistance levels. ETH price outperforms the market recovery with a 50% gain last week and BTC price follows with a 23% gain.
What can prevent the summer rally of cryptocurrencies?
U.S. stocks should remain in the green during this reporting season, Krueger said. Stock indices are responding well to earnings reports from Netflix, but Tesla and Apple reports could really define this period as a win or pullback for the cryptocurrency market.
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If the price of BTC and ETH can continue its current bullish trend, the next major hurdle could be the Fed and their September FOMC meeting. Kruger added:
After next week and before the September FOMC meeting (September 22), CPI inflation data, UMich inflation expectations and the payroll should be followed first, with the September CPI (September 13) being the key event. Mark these two dates on your calendars.
Credit : www.newsbtc.com