Market Update: Bitcoin Tests New Heights Amid Mixed Signals
Bitcoin (BTC) climbed above $84,000 on Monday as cryptocurrency markets rallied alongside U.S. stocks, but experts warn this surge could be short-lived. The broader crypto market gained 1.8%, while the CoinDesk 20 Index advanced 2.4%, suggesting strong momentum across major digital assets.
Key Market Movements
Notable performances include:
- Ethereum (ETH) stabilized above $1,900, up 2.8%
- Solana (SOL) gained 3% despite CME futures launch
- Ethena (ENA) surged 7% on institutional blockchain news
- Major altcoins SUI, AAVE, ICP, and NEAR each rose over 5%
Expert Warning: Potential Correction Ahead
LMAX Group strategist Joel Kruger has issued a stark warning about potential downside risks. According to Kruger, the monthly S&P500 chart patterns suggest a sustained correction could be imminent, potentially dragging crypto markets lower. His analysis points to a possible BTC retracement to the March 2024 peak of $73,000-$74,000.
Federal Reserve’s Critical Role
The cryptocurrency market faces a crucial test this week with the Federal Open Market Committee (FOMC) meeting. While rates are expected to remain unchanged, Coinbase Institutional’s head of research, David Duong, highlights the importance of potential changes to the Fed’s quantitative tightening (QT) program.
“Bank reserve levels near 10-11% of GDP could prompt the Fed to pause or end its QT program,” Duong noted in his latest report. This development could significantly impact market liquidity conditions.
Market Outlook and Trading Strategy
Despite current market uncertainty, analysts remain optimistic about long-term prospects. Coinbase’s research suggests that while crypto prices might find their bottom in the coming weeks, a strong rebound could lead to new highs later this year.
Source: CoinDesk