With the crypto market continuing to move in correlation with the U.S. stock market, traders carefully analyze trends in the S&P 500 index to take Bitcoin positions during the bear market. Now, Morgan Stanley’s CIO and bear market expert Michael J. Wilson predicts the U.S. stock market could witness a 16% short-term rally. However, the rally will come only in the absence of an earnings capitulation or an official recession.

Morgan Stanley’s Michael J. Wilson Expects a Short-Term Rally

Bear market expert Michael Wilson sees a short-term recovery in the U.S. stock market as S&P 500 tests the 200-weekly moving average (WMA), reported Bloomberg on October 17. The S&P 500 fell 25% this year as the bear hug tightened under rate hikes and worse macroeconomic conditions.

Meanwhile, Bitcoin (BTC) price continues to struggle under $20k, with the 200-WMA near the $23,000 level. Although, there have been several bear market rallies since the BTC price plunged below $20k in June. However, bulls failed to maintain strength and bears takes over, pushing Bitcoin price to dive below $20k again.

Moreover, the BTC price has failed to surpass the 200-WMA since a short-term upside in August. At the time of writing, the BTC price is trading at $19,400, up nearly 2% in the last 24 hours.

Wall Street’s most prominent bearish voice Michael J. Wilson correctly predicted this year’s downfall. Despite maintaining his overall negative long-term stance on the stock market, he predicts a 16% upside from current levels.

“While that seems like an awfully big move, it would be in line with bear market rallies this year and prior ones.”

Crypto Market Awaits Next Fed Rate Hike

The traders await the next Fed FOMC meeting on November 2 which could potentially drive the market for the next few months. While the recession fears continue to mount, the Fed retains its hawkish stance to curb inflation.

According to the CME FedWatch Tool, the probability of a 75 bps rate hike is 95.4% now, while the Dollar index moves higher near 113.

Meanwhile, Morgan Stanley’s Michael Wilson believes inflation has now peaked. Moreover, the Fed could go with a 50 bps rate hike despite the core CPI jumping to a 40-year high.

Varinder is a Technical Writer and Editor, Technology Enthusiast, and Analytical Thinker. Fascinated by Disruptive Technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence, and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a substantial period and is currently covering all the latest updates and developments in the crypto industry.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.