Bitcoin Increases Correlation with Stock Market Ahead of Key Macro Data Releases

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According to CoinFactiva analysts, the dynamics of Bitcoin, the first cryptocurrency, have shown a closer correlation with the stock market as traders maintain a cautious stance ahead of the release of the US Consumer Price Index (CPI) and the Federal Reserve’s rate decision.

Anticipation Around Federal Reserve’s Decision

According to the CME FedWatch Tool, a staggering 99.4% of participants believe that the Federal Reserve will keep the key interest rate unchanged at its upcoming meeting on June 12. Similarly, for the meeting on July 31, the consensus remains largely negative, with 91.1% expecting the current rate to be maintained.

However, sentiments for the September meeting are showing signs of optimism, with 48.3% predicting a rate cut of 25 basis points.

CPI Release and Its Impact on Bitcoin

The market is also eagerly awaiting the publication of the CPI on June 12. In May, the release of a lower-than-expected CPI led to a strengthening of Bitcoin.

Recent Bitcoin Performance

In early June, fueled by positive sentiment, Bitcoin approached the $71,000 mark. However, following the release of US unemployment data, the cryptocurrency’s value fell below $69,000 and has continued to decline since then.

At the time of writing, Bitcoin is trading at $67,918, down 4,2% over last 7 days* (*CoinGecko). Its market capitalization stands at $1.33 trillion.

Performance of Major Cryptocurrencies

Most major meme coins have also experienced declines over the past week: SHIB (-8.5%), DOGE (-13%), PEPE (-17.1%), WIF (-21.2%), and BONK (-15.3%). Among relatively large coins, only BRETT has seen an increase, gaining 37%.

ETF Inflows and Expert Opinions

On June 10, a 19-day streak of inflows into spot Bitcoin ETFs was interrupted, with net outflows from the funds reaching $64.9 million in just 24 hours.

Former BitMEX CEO Arthur Hayes recently highlighted changes in the macroeconomic environment and urged investors to buy Bitcoin.

Experts from Bitfinex have noted that during the current bull market, Bitcoin is expected to form a peak at some point in the fourth quarter of 2024. They also emphasized the potential for further growth.

This article captures the recent trends and anticipations in the cryptocurrency market, highlighting Bitcoin’s increasing correlation with traditional financial markets and the cautious yet optimistic outlook among traders and experts.

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