Morgan Stanley Executive predicts that Bitcoin will witness a short-term rally
Over time, the crypto market has strongly correlated with US stocks, and Bitcoin has indicated a significant correlation with the S&P 500 index. The price of the primary crypto asset has followed a similar pattern to the stock.
Many BTC expert predictions were drawn from the possible outcome of the stock stock. Bitcoin’s response to critical macroeconomic conditions is also related to that of the stock index.
Following the correlation between the two markets, some market experts provide forecasts for future price trends. According to Morgan Stanley’s CIO, Michael J. Wilson, the US will soon have a short-term rally of 16%. The bear market expert noted that the price rise would only be possible without an official recession or profit capitulation.
Short-Term Price Recovery in Stock Markets and Bitcoin Status
According to Wilson, the US stock market will witness a short-term upswing. This opens up the possibility of the S&P 500 hitting its 200-week moving average (WMA), according to Bloomberg.
Due to the unfavorable macroeconomic conditions and the effects of the increased interest rates, the index fell this year. However, the current price movement for Bitcoin has not been too impressive.
The BTC price is currently below the critical level of $20K. Also, the 200-WMA is close to the $23k region. Even with its short-term rally in August, Bitcoin has yet to cross the 200-WMA.
Bitcoin has experienced several price gains after the crypto winter that pushed the price below $20,000 in June. But the fight seems to be endless. The bulls have yet to take a more potent force against the bears and are still keeping the BTC price below $20K.
Remember, Wall Street’s most notable prominent bearish voice, Michael Wilson, correctly predicted this year’s decline. His position on a long-term overall negative trend in the stock market remains unaffected. But at the moment, he predicts a short-term price increase of 16%.
Wait for the Fed’s next rate hike
The activities in the crypto market seem to drag on for a long time. Most traders take their time with few or no significant transactions. Instead, they await the outcome of the next Fed FOMC meeting scheduled for November 2. The decision in the meeting will drive the market in the coming months.
A report from the CME FedWatch Tool indicates a 95.4% chance of another 75bps hike. The dollar index is also moving higher towards 113. Remember that the US Federal Reserve has maintained a hawkish stance to control inflation despite growing fears of a recession.
From Michael Wilson’s analysis, inflation has peaked. Even if the core CPI data rose to a 40-year high, the Fed could impose a 50 bps rate hike.
At the time of writing, Bitcoin is trading at $19,536, indicating an increase of 1.42% in the last 24 hours.
Featured image from Pixabay and chart from TradingView.com
