Bitcoin Lags Behind Global Market Rally, Raising Caution Among Investors
The leading cryptocurrency Bitcoin failed to rally with global markets this week triggered by cooling US inflation. The recent decoupling of Bitcoin from the global markets has left investors worried about the token’s outlook.
While S&P 500 and Nasdaq closed at their highest since April 2022 on Wednesday, Bitcoin failed to join the rally.
S&P 500 cleared the 4,500 mark for the first time in the last 15 months on Thursday as it ended at 4,545.86, according to Dow Jones Market Data.
The recent stock market triggered on the heels of the recent Consumer Price Index report showing U.S. consumer prices registered their smallest annual increase in three years.
However, the rally did not extend to Bitcoin, the largest crypto in terms of market cap.
U.S. central bank officials said earlier this week that the end of the US Federal Reserve’s current monetary policy tightening cycle is getting close.
But the officials added that inflation is still too high and the Fed is likely to raise interest rates at least one more time.
Fed policymakers have continuously hiked interest rates by 5 percentage points since March 2022 to tackle highest U.S. inflation in four decades.
The speculation around the end of rate hikes has risen given the positive CPI and Producer Price Index (PPI) data further triggering a rally in stock markets.
Tony Sycamore, a market analyst at IG Australia Pty, said that Bitcoin was an outlier in terms of widespread risk seeking in pretty much every asset class after the US inflation data, Bloomberg reported. “To me that’s not a good sign,” he added.
Sycamore further warned that odds of Bitcoin falling toward $25,000 to $26,000 are building.
Some crypto analysts also reasoned that the recent $300 million worth Bitcoin
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