- Following Elon Musk’s acquisition of Twitter, Dogecoin outperformed all other highly ranked cryptocurrencies. In terms of the overall crypto ecosystem, Twitter is a pretty important spot.
- Eyes are on the Federal Reserve meeting (FOMC) this week on Wednesday as the market sentiment has shifted more in favor of the bulls as BTC has surpassed $20,000 and ETH has surpassed $1,500 price levels.
- Block Inc.’s Cash App, a mobile app for processing payments, now supports transactions made using the Bitcoin Lightning Network. The Lightning Network has a cap on BTC transactions of $999 every seven days.
- Over the course of five days, roughly one-third of the S&P 500 companies will report earnings. This week, Pfizer, Starbucks, and other big businesses will release earnings reports. After releasing its third-quarter earnings, Meta Platforms, Inc. fell by 24%.
- Investors will also have the Federal Reserve meeting and Jerome Powell’s press conference to take into account, and they expect the central bank’s hawkish stance to be confirmed and the target rate to be raised by 75 basis points.
- As November 8 nears, many will also be preoccupied analyzing the potential effects of the upcoming U.S. election on the market, sectors, and specific stocks.
The price of Bitcoin (BTC) ramped up on Friday as a U.S. government report revealed that the Federal Reserve’s preferred inflation rate increased less quickly than anticipated last month. This is significant because it indicates that the Fed is making progress in its effort to slow down price increases, which suggests that it may be able to ease up on its tightening of monetary policy sooner rather than later. Tightening monetary policy is thought to have a negative impact on the prices of risky assets, such as stocks and bitcoin, and is the reason why this is important.
The BTC price surge past $20,000 has bumped up the bullishness of the market. The 5.6% increase in Bitcoin since Sunday is the largest weekly increase in the previous three months. The Federal Open Market Committee meeting of the Federal Reserve, however, will be the crucial test. The majority of traders anticipate that the Federal Reserve will increase the benchmark interest rate by 75 basis points (0.75 percentage points), but the drama will likely come from the signals that Fed Chairman Jerome Powell gives regarding the committee’s agenda for its meeting in December.
The majority of Big Tech had a bad week, while bitcoin and other cryptocurrencies rose. Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), and Microsoft (MFST) all released their most recent quarterly financial results last week. Except for Apple, every single one of these businesses had a terrible year. Google lost 6.2%, Amazon lost 13.3%, Apple gained 4.5%, Meta crashed by 23.5%, and Microsoft lost 4.8% between October 24 and October 28. Bitcoin increased 6.8% in the meantime.
It is encouraging to see bitcoin break its much-discussed correlation to tech stocks for at least one week, as it has the potential to become a new macro asset with some degree of uncorrelation to traditional macro assets. A week obviously isn’t enough time to completely eliminate the correlation, but it does make a dent in both the statistical reality and the story. When the correlation between equities and bitcoin (BTC) turns negative, this is known as decoupling. The Decoupling is also meant to be aggressive; one of its identifying characteristics is “Gradually, then suddenly.”
Concluding Thoughts:
Increased momentum was present during the late-week spike in cryptocurrency prices. Large BTC holders have been moving coins to exchanges over the past week. This is not the best indication for investors with a bullish outlook, as coins are frequently transferred to exchanges in order to prepare them for quick sale. Before the CPI data on November 10 come out, this trend might only be a precaution. In spite of this, as of October 25th, the switch to exchanges seems to have stabilized. In this situation, where stocks like Meta and Amazon are collapsing, Bitcoin and (most of) crypto benefit from the lack of earnings announcements. While Amazon is down 13.3%, Meta is down 23.5%, and Bitcoin is up 6.8%. The cryptocurrency seems stable in comparison to corporate giants Meta and Amazon.
