Stock market correlation is a heated topic in the cryptocurrency world. Some enthusiasts posit that bitcoin (BTC) moves in close alignment with the major US indexes, while others point to inconsistencies in the data to suggest otherwise.
But both camps have to agree that BTC’s strong upward momentum in close correlation to the S&P and Nasdaq composites is a cause for celebration right now.
The BTC/USDT pair is on its fifth straight day of green candlesticks, having closed nearly 3% higher on Wednesday and rallied another percentage point this morning.
Having reached an intraday high of US$18,835, bitcoin did fall back as the sellers cashed out, but the benchmark cryptocurrency still remains above US$18,100.
Further downside could result in a move down to US$18,000, which would still place BTC well above the 20-day moving average.
Bitcoin (BTC) reaches higher – Source: currency.com
Traders should keep their eyes on today’s US inflation read.
If, as expected, the yearly inflation rate goes down, it could further boost risk-on assets like bitcoin due to the perceived promise of lower interest rates down the line. But the opposite also rings true- disappointing results could encourage a sharp bearish reversal.
Ethereum (ETH) is similarly strong, having sustained two-months highs of US$1,400 this morning following an impressive 4% rally on Wednesday.
Top movers in the altcoin space include Avalanche (AVAX), which closed a whopping 25% higher on Wednesday following news that Amazon (NASDAQ:AMZN) Web Services has partnered with Ava Labs, to help scale blockchain adoption across enterprises, institutions and governments.
All other major altcoins, including Cardano (ADA), Polygon (MATIC), Ripple (XRP) and BNB remain in the green on a weekly basis.
Global crypto market capitalisation is currently testing four-week highs of US$890bn, while total volumes locked across all decentralised finance (DeFi) protocols exceeded US$42bn for the first time since mid-December.
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