April Crypto Market Prediction – Bitcoin and S&P500 to Soar Despite Global Inflation
Amidst high global inflation rates, Bitcoin and major market stocks have experienced a rally in the first quarter of 2023. The largest digital asset by market capitalization, Bitcoin, has regained its pre-FTX levels and is on track to regain its pre-Terra Luna UST- score. In addition, it has broken out of a macrologarithmic downtrend during the recent bull rally.
Bitcoin rises amid high inflation
With inflation rates on the rise globally, investors are looking for alternative investment opportunities. This has led to an increase in demand for Bitcoin and other crypto-assets. As a result, Bitcoin has seen an increase in value, reaching pre-FTX levels and on its way to regaining its pre-Terra Luna UST position. This increase in Bitcoin’s value is attributed to the shift in investors’ preferences towards risky assets.
Similarly, major global indices such as the S&P 500 and the Dow Jones Industrial Average Index are also expected to resume their all-time highs (ATH) soon. Despite a period of consolidation in the last three months, these indices are likely to break out due to the change in investor preferences towards equities.
Global banking crisis and oil shortage
The recent global banking crisis and crude oil shortages have contributed significantly to the rising inflation rates. OPEC+ affiliates announced they will cut production by 1.16 million barrels per day starting in May. This news has led to a shortage of crude oil, which has caused a ripple effect on the global economy, leading to an increase in inflation rates.
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April Bitcoin and S&P 500 Historical Data
According to aggregated data tracked by crypto service provider Matrixport, the Bitcoin price has returned an average of 17 percent in April over the past ten years. On the other hand, the S&P 500 index has had an average return of approximately 2.58 in April over the past ten years.
With Bitcoin showing a significant correlation with major market indices in the macro markets, analysts predicted more upside volatility in April. Nonetheless, the overall impact of crypto volatility may be determined by Ethereum’s Shanghai upgrade scheduled for April 12.
“The recent bull rally in US stocks should have positive ripple effects for crypto as well – especially as we now enter the month of April, which has been strong for US stocks (SP500 +2.6%, Nasdaq +2.9%), Bitcoin + 17%, and Ethereum +46%. Our big thesis for 2023 that inflation will decrease is playing out. All risk assets should accumulate, said Markus Thielen, head of research and strategy at Matrixport.
