In the current financial environment, experts point out that the Federal Open Market Committee (FOMC) is expected to maintain a stable interest rate. The meeting is scheduled for January 30-31.

The Fed is reportedly set to maintain the status quo as recent economic data has been better than expected. Bloomberg analysts noted that the focus has now shifted to the Federal Open Market Committee (FOMC) March meeting and beyond, with any policy easing expected to likely only begin after that.

Against this backdrop, Wall Street closed the week on a positive note, with the S&P 500 hitting a new all-time high on Friday. The surge was particularly pronounced among technology companies, pushing the main U.S. stock benchmark past its peak since January 2022, the Financial Times noted.

Technology relevance: a sloppy metric

Compared to the surging stock market, Bitcoin’s performance remains modest. The king coin is currently trading below $42,000. The trading volume in 24 hours is $7.267 billion, according to CoinGecko. This muted reaction in the cryptocurrency market comes amid some optimism in the stock market. However, the key word here is “some,” considering that few analysts believe that this is just early optimism ahead of the release of quarterly earnings. Still, the market is expected to remain optimistic.

Kevin Davitt, director of options content at Nasdaq, noted that the correlation between Bitcoin and NDX is quite high, reaching 0.805. However, he mentioned that sometimes this correlation weakens, which may bring investment opportunities in Bitcoin and other funds. Therefore, the stock market itself cannot be used as an indicator of Bitcoin's trend.

Bitcoin price trend weak

Pantera Capital recently pointed out in an analysis that crypto bull cycles usually have two phases. They pointed out that while Bitcoin outperformed the alt market in the first phase, it was followed by the second phase. The latter is a period when altcoins dominate. Pantera said that this shift is due to investors seeking innovation-driven high-growth tokens, resulting in altcoins outperforming Bitcoin.

If the rate cut is in line with the halving schedule, Bitcoin is expected to rise significantly. However, Bitcoin’s dominance almost reached 55% last week, but has now fallen. According to data from TradingView, it is 51% at the time of writing. As investors increasingly turn to altcoins, the market may see more obvious growth in the broader market, but this is why Bitcoin remains range-bound.

Given this pattern and current macroeconomic sentiment, Bitcoin’s performance may continue to be in a phase of price stability in the coming weeks. But for now, market confidence remains high due to the recent approval of a Bitcoin ETF.