The crypto market’s rebound picked up momentum after the S&P 500 hit a new all-time at 5,670, influenced by the possibility of a 50 basis point interest rate cut on Sept. 18.
The total crypto market capitalization has risen by approximately 4% in the last 24 hours to reach $2.1 trillion. The rise in market cap includes gains from Bitcoin (BTC) and Ether (ETH), which have risen around 5% and 3.4%, respectively.
Crypto market performance Sept. 18. Source: Coin360
Let’s look at factors driving the crypto market up today.
Risk-on sentiment pushed the crypto market up
Today’s rally mirrors the strength witnessed in US equities. The S&P 500 hit a new all-time high at 5,670.81, and it’s up approximately 20% in 2024. This performance highlights the impact of the surge in the valuation of the largest companies listed on stock exchanges in the United States.
Source: The Kobeissi Letter
Meanwhile, market participants have shifted their focus to the US Federal Reserve’s decision following a two-day Federal Open Market Committee (FOMC) meeting scheduled for Sept. 17 and Sept. 18.
The US central bank is expected to initiate a series of rate cuts on Sept. 18 after raising borrowing costs to their highest level in nearly twenty years.
“This is going to be the most uncertain Fed decision in over a decade,” declared capital markets commentator The Kobeissi Letter in a Sept. 17 post on X.
According to data from CME Group’s FedWatch Tool, the odds of a 0.5% rate cut coming at the Sept. 18 FOMC meeting are around 65% at the time of writing, against 35% expectation of a 0.25% rate cut.
Fed target rate probabilities for Sept. 18 FOMC meeting. Source: CME Group
“Regardless of what the Fed does tomorrow, half of the market will be unhappy about it.”
Spot Bitcoin ETF inflows boost the crypto market
The market recovery further reflects a growth in bullish sentiment by spot Bitcoin exchange-traded fund (ETF) traders and investors.
The U.S.-based spot Bitcoin ETFs witnessed net inflows of $403 million during the week ending Sept. 13. The trend continued into the week, with the ETFs witnessing $12.8 million in inflows on Sept….
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