The US stock market shows bullish technical signals and may rise further, while the A-shares surge rapidly under policy stimulus. Despite multiple macro factors favoring risk assets, the cryptocurrency market has performed poorly, even experiencing a recent widespread decline, with October starting off as the worst since 2019.
On October 3, influenced by geopolitical factors, the price of BTC fell to a low of $59,828, breaking below $60,000, down 5.8% from the opening price on October 1. Fortunately, the support level at $60,000 for BTC is quite strong, and after a brief drop, BTC returned above $60,000, reaching a peak of $64,478 on October 7, with the current price fluctuating around $62,000. Due to the strong resistance at the current breakout level, BTC is expected to continue a period of range consolidation, waiting for favorable catalysts to be released (the above data is sourced from Binance spot, October 08, 15:00).
It is worth noting that the recent price lows after BTC's decline are higher than previous lows, indicating that the value trend aligns with strong expectations for Q4, and it is not ruled out that BTC may still have the opportunity to set a new high before the end of the year.
Market Analysis
US September Non-Farm Payroll Data Exceeds Expectations, Significantly Boosting US Stock Market Sentiment
Last Friday, the US non-farm payroll data was released, showing strong performance for September, with an increase of 254,000 jobs (expected 150,000) and the unemployment rate falling to 4.05%. This data significantly boosted US stock prices and the exchange rate of the dollar against fiat currencies last Friday, leading to a rapid increase in crypto assets, surpassing the impact of the dollar and US interest rates.
On Monday, Federal Reserve Chairman Jerome Powell stated that officials are not in a hurry to cut interest rates. Market sentiment suggests that the September employment report may close the door on the Fed's potential 50 bp rate cut next month, keeping officials on a 25 bp rate cut track.
A-Share Siphoning Effect Begins to Show, Capital Outflow from Crypto Market
China has launched an economic stimulus plan exceeding 7.5 trillion yuan, leading to a strong rebound in A-shares under policy stimulus. Since September 24, the Shanghai Composite Index has risen over 20%, reaching a new high since May 2023. On October 5, Goldman Sachs upgraded its rating on A-shares to "overweight," sparking extensive discussion, with both domestic and foreign capital closely monitoring the A-share market.
As the popularity of A-shares continues to rise, capital may continue to flow out of the crypto market for a period, potentially increasing resistance to BTC's rise.
Escalating Geopolitical Impact, Crypto Asset Prices Under Pressure
The geopolitical situation in the Middle East continues to escalate. Following Iran's missile attack on Israel, Israel vowed to retaliate. With uncertainty about whether the current situation will ease, the tense geopolitical climate has put pressure on crypto asset prices. The safe-haven attribute of crypto assets has weakened in the current environment, increasing their correlation with US stocks.
Hot Topics
Polymarket Shows Trump Surpassing Harris Again in US Election Betting
On October 8, Polymarket's real-time data showed that the probability of Trump being elected as the 2024 US President is 52.6%, while Harris's probability is 42.3%, trailing Trump by 6.3 percentage points. In the vice-presidential debate, Vance leveled the polling support for Trump. However, due to the relatively tight polling data for this election, the results remain worth watching until they are finalized.
ETH Inflation Rate Rises to Nearly Two-Year High
Binance's October monthly market insight report indicates that the inflation rate of ETH has surged to 0.74%, reaching a two-year high. The report notes that the rise of Layer 2 has reduced gas fees, leading to a decrease in the amount of ETH being burned.
Current Layout
Currently, BTC has maintained a consolidation period between $50,000 and $70,000 for six months. Before the catalysts such as the election take effect, BTC may continue to consolidate, showing a fluctuating trend. Meanwhile, looking at the options market, the downward volatility of spot prices due to geopolitical tensions has intensified, leading to relatively strong demand for put contracts with short-term expirations (especially those expiring in October and November 8).
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Disclaimer: The above content does not constitute investment advice, sales offers, or purchase offers to residents of the Hong Kong Special Administrative Region, the United States, Singapore, or other countries or regions where such offers or invitations may be prohibited by law. Digital asset trading may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided herein.
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