The main dishes to remember:
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The demand of institutional investors and the adoption of companies can push higher bitcoin despite fears of recession.
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The conviction of investors that the American federal reserve will hold rates favorable to the price of Bitcoin.
The stock markets around the world reacted positively to the temporary suspension of import prices between the United States and the European Union, the S&P 500 increasing 1.5% on May 27. However, concerns about a global economic recession persist, the Bitcoin (BTC) cap, especially since the American import rates were raised for most regions.
Bitcoin remains antifragile and ready to surpass uncertain times
Given the growing uncertainty of investors on economic conditions, Bitcoin oscillates around the level of $ 110,000 has surprised investors when it consolidates the position of the first 6 as a global negotiable asset by market capitalization. Investors are now asking if Bitcoin becomes antifragile or if a drop below $ 100,000 is inevitable in a recession environment.
Merchants currently estimate 41% like the American Federal Reserve (Fed) will maintain interest rates until September, a sharp increase of only 2% a month ago.
Normally, a higher cost for capital is lower for risky assets such as Bitcoin. However, in this context, he also suggests potential Fed liquidity injections, taking into account unfavorable American tax prospects, where public spending exceeds income capacity.
President Donald Trump called for a drop in interest rates, but the president of the FED, Jerome Powell, remains cautious due to a strong labor market and an increase in inflation pressures, whether pulled by easy credit or credit conditions. This tension helps to explain why the S&P 500 struggled to resume its summit of 6147 in February and why the increase in Bitcoin was also limited.
The current Bitcoin market capitalization of 2.2 billions of dollars now exceeds that of Google and Meta, which partly explains the level of resistance of $ 112,000. However, it would be inaccurate to suggest that Bitcoin has decreased from traditional markets; Its 30 -day correlation with the S&P 500 remained greater than 70% in the past four weeks. As such, if the actions enter a bear market, Bitcoin is also faced with the decline.
Companies are currently publishing profits for the first quarter, a period prior to the escalation of the trade war. Consequently, the stock market can take more time to reflect the full negative impact, even if macroeconomic indicators show signs of contraction. The 6.3% drop in orders for American sustainable goods in April, reported on May 27, could be the first signal of a weakening economy.
However, even if the profits of companies for the first quarter are not expectations, this does not automatically mean that the S&P 500 will suffer significantly. In fact, disappointing results could open the door to faster interest rate reductions, which tend to benefit businesses by reducing funding costs and potentially stimulating consumer demand.
Bitcoin call as a strategic asset is developing, Trump Media joins the party
The risk profile of Bitcoin seems to have improved after Trump Media and Technology Group announced its intention to acquire BTC following a combination of 2.5 billion dollars in debt and stock funding. “We consider Bitcoin as an instrument of financial freedom,” said Trump Media CEO, Devin Nunes, according to Reuters. This development suggests that Bitcoin trajectory around $ 112,000 is not only linked to broader economic growth.
In relation: Bitcoin is $ 110,000, but institutional investors continue to move BTC
Institutional and growing interest in Bitcoin adds a new dimension to its market behavior. While macroeconomic trends and correlations with traditional assets are still counting, Bitcoin is increasingly considered a strategic asset with utility beyond speculation. As such, its performance could diverge, at least partially, to that of actions, especially since the adoption is expanding among the companies and influential investors.
Although the stock market can remain sensitive to macro-data and surprises of the profits, the potential for rise in Bitcoin seems to be based on a mixture of monetary policy, institutional positioning and its emerging role as a coverage against systemic financial risk.
This article is for general information purposes and is not intended to be and must not be considered as legal or investment advice. The points of view, the thoughts and opinions expressed here are the only of the author and do not reflect or do not necessarily represent the opinions and opinions of Cointellegraph.
