NewsletterStrong Crypto Rally As Sentiment Improves, Is Bull Market Next?
The crypto market continues to respond to the broader macroeconomic sentiment. As market sentiments improve, the crypto market is currently rallying. The Bank of England made a shocking decision to pivot to quantitative easing to protect England’s economy. The markets responded with a global rally.
Bitcoin surged by 4.35% in the last 24 hours and is currently trading at $19,547. Ethereum prices skyrocketed by 4.51% as well. ETH is currently trading at $1345. The rest of the altcoins reciprocated Ethereum’s surge.
BNB increased by over 5% to trade at $284.38 while Solana increased by another 4%. SOL is currently trading at $33.76. The global crypto market went up by 3% in the last 24 hours.
Why The Crypto Rally?
The strong crypto rally can be directly attributed to the surprising pivot by the Bank of England. BoE decided to indefinitely buy long-dated bonds to stabilize England’s economy. UK Prime Minister Liz Truss unveiled a large-scale unfunded tax-cut plan. However, it exacerbated England’s economic troubles. The sterling pound fell to historic lows as compared to the US dollar.
The Bank of England’s pivot is also seen as a response to the growing recession fears. The World Bank believes that the global economy will face a recession in 2023. The central bank’s decision to pivot to QE also bolsters the beliefs of many experts that the US Fed will eventually pivot as well.
The Fed has appeared in lock-step in its hawkish stance against inflation. Neel Kashkari of the Minnesota Fed believes that the interest rates may not be high enough. However, certain Fed officials such as Susan Collins of the Boston Fed are beginning to acknowledge the possibility of a recession.
S&P 500, which is strongly related to crypto, increased by 2% in the last 24 hours.
Is A Crypto Bull Market Next
The crypto rally has given hope to the bulls in the market. However, investors remain careful as the US dollar continues to strengthen. The Federal Reserve may continue its hawkish stance despite the pivot from its English counterpart.
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