Boosted by expectations of a potential US-Iran peace agreement, the stock market surged significantly, with both the Nasdaq and S&P 500 indices hitting record highs. Bitcoin is holding steady at $74K, and market sentiment has noticeably recovered. The Fear and Greed Index has climbed to the neutral zone at 55, marking its highest level since the decline last October.

FOMO Sentiment Rises, Nasdaq and S&P 500 Hit Record Highs

Investors are flocking to the stock market, pinning their hopes on a new round of negotiations between the US and Iran. The Associated Press reported on Wednesday that despite the escalating standoff in the Strait of Hormuz, both sides have made significant progress toward extending the ceasefire agreement and restarting talks for a long-term peace deal.

Algorithm-driven funds, which had previously slashed their equity holdings to multi-year lows, are re-entering the market. A Goldman Sachs report noted that so-called systematic investors are preparing to pour record amounts of capital into US equities.

The sell-off last month caused the S&P 500 to drop more than 9% from its peak. The Nasdaq 100 also experienced a technical correction during the war, falling 12% from its all-time high.

However, signs of easing tensions in the Middle East, coupled with optimism surrounding AI technology and corporate earnings, have reignited investors' FOMO (Fear Of Missing Out). The Philadelphia Semiconductor Index (which includes major companies like Nvidia, Broadcom, and Micron Technology) returned to record highs following the ceasefire announcement in early April. Yesterday, both the Nasdaq and S&P 500 indices reached new all-time highs.

Bitcoin Holds Steady at 74K, Market Sentiment Noticeably Recovers

The total crypto market capitalization increased by 0.83% to $2.53 trillion, with market sentiment showing a clear recovery. The Fear and Greed Index climbed to the neutral zone of 55, the highest level since the drop last October.

Spot trading volume has increased. However, the average perpetual funding rate remains negative, and Bitcoin's 24-hour liquidations have dropped by 60%. A surge in spot trading volume accompanied by rising prices typically indicates genuine buying interest, making this a bullish signal. Negative funding rates suggest that traders remain cautiously short; if buying pressure persists, it could drive prices even higher.

Bitcoin continues to dominate the market, with the BTC price holding at $74K. Moving forward, the market will be watching the key resistance level at the true market mean of $78,100.

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