XLM, XRP, Bonk, and Floki Rally as the Federal Reserve Triggers a Risk-on Sentiment in the Financial Market

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.

Stellar Lumens (XLM) price enjoyed a strong rally on Wednesday, reaching $0.1080 at its highest point. This marks a significant 36% increase from XLM's lowest price point observed earlier this month. Notably, XLM price also reached its highest level since June 5th.

Among the major cryptocurrencies, Ripple's XRP token has also demonstrated an impressive performance this week, surging to $0.5870, representing its highest price point since April 11th. This strong rally has placed XRP among the best-performing major cryptocurrencies in the market.

Furthermore, several other tokens have also exhibited remarkable gains. Bonk (BONK), a meme coin that has gained popularity, spiked to $0.000030. At the same time, Ondo Finance (ONDO) and Floki (FLOKI) also enjoyed substantial increases, reaching $1.30 and $0.00020, respectively.

Interestingly, a similar trend is observed in the stocks market, where the top indices in the United States, Europe, and Asia have surged to record highs. On Tuesday, the Dow Jones experienced a significant 700-point rise.

Moreover, key indices such as Australia's ASX 200, UK's FTSE 100, and Japan's Nikkei 225 also reached their all-time highs. These strong performances have instilled a palpable sense of greed within the financial market.

notably, the fear and greed index, which is monitored by CNN, has jumped into the greed zone, reaching a level of 64. This index comprises several sub-indexes, including market momentum, put and call options, and safe haven demand, all of which have moved into the extreme greed area.

In a parallel development within the crypto industry, the fear and greed index also shifted from the fear zone of 40 to the greed zone, reaching a level of 60.

The primary factor driving this sense of greed in the financial markets is the recent statement made by Federal Reserve Chair Jerome Powell. In his remarks, Powell stated that the Fed would consider cutting interest rates even before the headline inflation rate reaches the target of 2%.

Currently, the Fed's primary concern is centered around the labor market, as the jobless rate has risen to 4.1%, marking its highest point since 2021. In light of this, analysts anticipate that the Fed will likely deliver its first cut in interest rates at its meeting scheduled for September.

Apart from the Fed's statements, several other factors are contributing to this sense of greed in the crypto market. For instance, the Securities and Exchange Commission (SEC) has signaled its openness to approving spot Ethereum ETFs.

This move paves the way for the introduction of other spot crypto ETFs, such as those tracking Solana (SOL) and Avalanche (AVAX). Furthermore, crypto investors appear to have been accumulating Bitcoin, Ripple, and other major cryptocurrencies during the recent sell-off.

According to available data, spot Bitcoin ETFs have received over $16 billion in inflows throughout this year. Additionally, recent observations suggest that large XRP holders have been increasing their purchases of the cryptocurrency.

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