Bitcoin Surges 2.4% as U.S. Stocks Boost Crypto Market

Bitcoin's price surged past $84,000 on Monday, marking a positive day for the cryptocurrency market. This upward trend was supported by the continued rise in U.S. stocks, which lifted risk assets across the board. The broader crypto market saw a 1.8% increase, while the CoinDesk 20 Index outperformed with a 2.4% advance. Ethereum's ether (ETH) stabilized above $1,900, rising by 2.8%, and several altcoins, including SUI, AAVE, ICP, and NEAR, saw gains of more than 5%.

Solana also experienced a 3% increase, aligning with the broader market trends. The first day of SOL futures trading on an institutional-focused marketplace did not significantly impact investor sentiment. Ethena's governance token (ENA) rallied by 7% following the announcement of developing a proprietary blockchain with tokenized asset issuer Securitize, aiming to bridge decentralized finance (DeFi) and traditional institutions.

Key U.S. stock indexes continued their upward trajectory, providing a favorable environment for risk assets. However, LMAX Group strategist Joel Kruger cautioned that the monthly S&P 500 chart suggests a sustained correction for U.S. equities, which could negatively affect cryptocurrencies. Kruger highlighted concerns about global trade tensions, a potential slowdown in the U.S. economy, and the limited accommodation the Federal Reserve can offer, all of which could lead to further stock declines.

Kruger also noted the possibility of a lower low for BTC, potentially revisiting the 2024 March peak at $73,000-$74,000. The market widely expects the Federal Reserve to keep interest rates unchanged during this week's Federal Open Market Committee meeting. However, investors should monitor any changes in the central bank's balance sheet runoff or quantitative tightening (QT) program. David Duong, head of research at Coinbase Institutional, suggested that the Fed might pause or end its QT program this week, as bank reserve levels are near the 10-11% of GDP levels considered sufficient for maintaining financial stability.

Duong attributed the recent crypto selloff to macro concerns and deteriorating liquidity conditions, which could improve in the next quarter. This improvement could provide a tailwind for asset prices, potentially leading to a rebound in crypto prices to new highs later this year. The market's near-universal expectation of unchanged interest rates during the Federal Open Market Committee meeting underscores the cautious optimism surrounding the crypto market's future performance.