The Federal Reserve has triggered a risk-on sentiment in the financial market that has pushed the prices of Bitcoin and stocks higher this week.
XLM, XRP, Bonk, and Floki rally
The price of Stellar Lumens (XLM) soared to $0.1080 on Wednesday morning, reaching its highest value since June 5th and marking a 36% increase from its lowest point this month.
Ripple’s XRP token has performed remarkably well among major cryptocurrencies this week, surging to $0.5870, its highest level since April 11th.
Several other tokens have also made significant gains. Bonk, a popular meme coin, spiked to $0.000030, while Ondo Finance and Floki rose to $1.30 and $0.00020, respectively.
XLM vs XRP vs Floki vs Ondo vs Bonk
The same trend is happening in the stocks market, where the top indices in the United States, Europe, and Asia have surged to record highs. The Dow Jones rose by 700 points on Tuesday, while indices like Australia’s ASX 200, the UK’s FTSE 100, and Japan’s Nikkei 225 have also hit their all-time highs.
This performance has triggered a sense of greed in the financial market. CNN’s fear and greed index has jumped to a greed zone of 64. Its sub-indexes, like market momentum, put and call options, and safe haven demand, have moved to the extreme greed area.
The same trend is happening in the crypto industry, where the fear and greed index has moved from the fear area of 40 to the greed zone of 60.
Fed is committed to cut rates
The main reason for this greed is the Federal Reserve. In his statement this week, Fed Chair Jerome Powell noted that the bank would consider cutting interest rates before headline inflation drops to 2%.
The Fed is now mostly concerned about the labor market since the jobless rate has moved to 4.1%, its highest level since 2021. Therefore, analysts expect the Fed to deliver its first cut in its September meeting.
Other reasons have led to this greed in the crypto market. For example, the Securities and Exchange Commission (SEC) has signaled that it will give the green light to spot Ethereum ETFs, which opens the door to other spot crypto ETFs like Solana and Avalanche.
Additionally, crypto investors apparently accumulated Bitcoin, Ripple, and other cryptocurrencies during the last sell-off. Spot Bitcoin ETFs now have over $16 billion in inflows this year. Data shows that large XRP holders have also been buying more coins lately.
