The global crypto market registered marginal recovery over the last 24 hours. The cumulative market cap now stands at around $922.7 billion and the total trading volume has jumped more than 16% to $76.2 billion. However, the cryptocurrency Fear & Greed Index was down to 20 by Monday versus 22 a week earlier and 24 a day earlier and remains in a state of extreme fear.
Last week, US equities fell as the CPI report implied tighter monetary policy, followed by a rally amid prospects that tight monetary policy will cause a downturn that would prompt loose monetary policy. The S&P 500 started the day down and then rallied to end the day up 4.7%n - a similar fate to cryptocurrencies.
What you need to know
With the crypto market easily swung by the Fed and US economic indicators, we expect the correlation with the NASDAQ 100 to continue. Later today, NY Empire State Manufacturing numbers for October will draw interest from investors.
Speaking of economic indicators, last week’s FOMC meeting minutes revealed that some members are willing to ease the pace of rate hikes should economic indicators reflect cracks in the economy. This was reflected in the increased sensitivity to the last ISM Manufacturing PMI survey.
Despite the negative external backdrop, the likes of BTC has successfully held its September lows against much more worrisome sentiment in the stock markets. We see this stability in crypto prices as evidence of solid internal demand for risk.
As far as predictions go, down is likely to be the next direction for crypto markets, especially if there is an October stock slump in correlation with historic performance of equities. A recovery will be even harder if the USD index continues to rise, as it has done since Friday.