The cryptocurrency market continues to be in green, with significant gains made over the last weeks. Market sentiment is changing as Bitcoin and Ethereum gain previously lost ground.
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As the short-term macroeconomic factors that impact risk-on assets reduce in speed, there are increasing chances for a sustained bullish momentum. U.S. Federal Reserve began a no-contact period with the media. Dollar inflation is expected to fall.
The Consumer Price Index, (CPI), measures this indicator at a high of 40 years. According to Bank of America data it will drop in its July print. According to the Bank of America, they surveyed the market. determined investors “really expect inflation to drop”Over the next two-years.
In addition, as stated by economist Alex Krüger, U.S. equities indices are trending to the upside with “remarkably strong” technical. The Nasdaq 100 and the S&P 500 have broken out of long ascending triangles which suggests a reclaimed of previous highs.
The Nasdaq 100 trades at 12,343, with significant gains since the beginning of July. Krüger believes this Index could return to its April 2022 levels which would represent an important bullish trend. According to Kruger, the economist saidTweet:
Given the absence of Fed surprises until September’s FOMC (expect July to be a non-event) and assuming no major negative developments on the European front, a summer rally taking prices there makes sense to me.
This trio of factors is the most favorable scenario for macro-economic conditions. It has had a good correlation with the Nasdaq 100, and may benefit from a rally in summer.
Bitcoin and Ethereum are breaking through critical resistance levels already. ETH’s price leads the market recovery with a 50% profit in the past week and BTC’s price follows with a 23% profit.
Is There Anything That Could Stop A Crypto Summer Rally From Taking Place?
According to Krüger, U.S. equities need to remain in the green during this earnings season. Stock indices have been reacting well to earnings reports from Netflix, but Tesla and Apple’s reports could truly define this period as a win or a retrace for the crypto market.
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If BTC and ETH’s price can extend their current bullish trend, the next major obstacle might come from the Fed and their September Federal Open Market Committee (FOMC) meeting. Krüger added:
After next week and before September’s FOMC (Sep/22) the main things to watch will be CPI inflation data, UMich inflation expectations and payrolls, with the key event being September’s CPI (Sept/13). These two dates are important to note on your calendars.