Under the influence of macro factors, the correlation between cryptocurrency and the U.S. stock market is approaching a historical high

According to a correlation study reported by Odaily Planet Daily, the linkage between digital assets and the U.S. stock market is nearing historical highs, indicating that macroeconomic variables driving the stock market are also shaping the crypto market.

Data compiled by Bloomberg shows that the 40-day correlation coefficient measuring the largest 100 digital assets with the SP 500 index is about 0.67, an indicator only surpassed in Q2 of 2022 when it exceeded 0.72. A reading of 1 indicates synchronized asset trends, while a reading of -1 indicates opposite trends. Last week, after the Federal Reserve significantly cut interest rates by 50 basis points initiating an expected cycle of monetary easing, U.S stocks hit record highs and Bitcoin prices broke through $64k USD. The upcoming U.S economic data is now crucial for all kinds of traders as they can glean clues about potential extent and speed further cuts in benchmark borrowing costs from it.

Caroline Mauron, co-founder of Orbit Markets which provides liquidity for digital asset derivatives trading said: "Macroeconomic factors are currently driving cryptocurrency prices unless we see a black swan event specific to cryptocurrencies this situation should continue throughout Fed's entire easing cycle." (Bloomberg)