Bitcoin">Bitcoin trails behind raging stock markets, showing subdued price action under $42,000 this week – a lukewarm response as the S&P 500 clinches fresh record peaks. The divergence comes even as analysts predict the Fed will stand pat on interest rates at its upcoming January 30-31 FOMC meeting.
The shift in market momentum has propelled the S&P 500 to new heights, surging past levels last seen in January 2022 per the Financial Times. The rally brings a wave of optimism, especially for tech stocks, as quarterly earnings reports loom.
In contrast, Bitcoin struggles to find momentum despite historically high correlation with tech stocks. Pantera Capital posits crypto bull runs often see Bitcoin lead first before attention shifts to higher-growth altcoins.
As crypto investors chase innovations in DeFi, NFTs and more, Bitcoin dominance declined from 55% to 51% on TradingView. With market confidence lifted by recent Bitcoin ETF approvals, the wider crypto sector could continue outpacing the pioneer asset.
But all eyes now fixate on March and beyond – where Bloomberg analysts expect any concrete Fed policy changes. Upcoming Bitcoin block reward halvings could interplay with policy easing as well. For now, range bound price action persists for digital gold.
