Why is the crypto market up today?

The cryptocurrency market is up today, with the total market capitalization rising by approximately 1% in the last 24 hours to reach $2.11 trillion on Aug. 9. The rise in market cap includes gains from Bitcoin (BTC) and Ether (ETH), which have risen around 1.1% and 0.3%, respectively.

Crypto market performance June 27. Source: Coin360

Let’s look at the major catalysts driving the crypto market up today.

Positive sentiment propels crypto prices higher

The crypto market recovery on Aug. 9 mirrors the strength witnessed in US equities. The US stock market has gained 5% in valuation over the last 24 hours, with the S&P index posting its “best day since November 2022,” according to capital markets commentator The Kobeissi Letter.

Source: The Kobeissi Letter

The S&P 500 and Nasdaq hit five-day highs, with the S&P 500 “adding over $1 trillion market cap” on Aug. 8 with a daily ascent of 0.4%, said The Kobeissi Letter, adding’

“Markets continue to find relief in the recent comments from the Bank of Japan. The Yen carry trade seems to be alive for now.”

Meanwhile, US Initial Jobless Claims decreased to 235,000 during the week ending July 20, according to the US Department of Labor (DoL) released on July 25. The numbers came in below initial estimates of 240,000 and were lower than the previous weekly gains of 250,000. Additionally, continuing claims increased by 21,649 to 1.96 million during the week that ended Aug. 4.

The market remains wary of the implications the current macroeconomic conditions could have on the Federal Reserve’s monetary policy. While the Federal Open Market Committee (FOMC) is expected to meet on Sept. 18, there are high expectations of the first rate cut since March 2020.

Market participants are expecting one to two interest rate cuts toward the end of the year, in September and November. According to data from CME Group’s FedWatch Tool, the odds of a rate cut coming at the September FOMC meeting are around 100% at the time of writing.

Fed target rate probabilities for Sept. 18 FOMC meeting. Source: CME Group