Earlier on Monday, cryptocurrencies were in full swing, while the stock market was mixed, and gold prices fell slightly as investors focused on the earnings season, with reports from Goldman Sachs, Citigroup, and Bank of America due on Tuesday, and Morgan Stanley on Wednesday.
Trade Nation Senior Market Analyst David Morrison noted: "Over the weekend, the Dow Jones Industrial Average and the S&P 500 reached new highs, with the former closing at 43,000 points, and the latter breaking through 5,800 points for the first time." "It turned out to be a positive week, with all major stock indices rising by about 1%, and the Dow Jones recording its fifth consecutive week of gains."
He added: "Overall, the stock market has shown significant resilience." "This is usually a difficult time of the year for stocks, but investors continue to increase their risk exposure. Meanwhile, volatility is on the rise, with the near-month VIX rebounding above 20, indicating that investors are also increasing their hedges in the form of S&P put options. Bond yields also remain at higher levels, with the key 10-year Treasury yield hovering around 4.10%, well above the 3.60% seen at this time last month."
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Morrison emphasized: "The third-quarter earnings season started well, with JPMorgan Chase, Wells Fargo, Bank of New York Mellon, and Domino's Pizza all releasing positive reports." "So far, only Delta Air Lines has been disappointing. There are no reports today, and the U.S. bond market is closed for Columbus Day. However, significant earnings updates this week include Goldman Sachs, Citigroup, Bank of America, Morgan Stanley, UnitedHealth, and Netflix."
As for the source of the rising volatility, Morrison pointed out: "Last week's inflation data were mixed, as the core CPI moved in the wrong direction. The market still expects the Federal Reserve to cut rates by 25 basis points in three weeks. However, if there is further evidence that the downward trend in inflation has stalled, or if employment data significantly strengthens, the possibility of a pause in the rate-cutting cycle cannot be ruled out."
The Chicago Mercantile Exchange's FedWatch tool currently shows a 16% chance of the Federal Reserve keeping rates steady at the November meeting.
Bitcoin (BTC) rose above $66,000 for the first time since September 30, reaching a high of $66,321, as bulls prepare for a fierce battle at key resistance levels.
FxPro Senior Market Analyst Alex Kupcsikevich noted: "The cryptocurrency market, valued at $2.23 trillion, has roughly returned to levels seen a week ago, with two growth phases—Thursday's close and the start of trading on Monday." "Market sentiment has shifted from fear back to the neutral zone (48), while sentiment for U.S. stock indices is close to extreme greed."
He added: "Bitcoin broke through the $64,000 mark on Monday morning, accelerating intraday gains after breaking through the 200-day moving average." "This is a repeat of last week's price failing to consolidate momentum above that line. Looking back at the optimistic sentiment in the stock market and BTC's strong rebound after falling below $60,000, we give more opportunities for growth development and test $65,000 at the intersection of the circular level in March and the upper limit of the downward channel."
Kupcsikevich said: "Ethereum (ETH) climbed to $2,500, accelerating its rise on Monday at its 50-day moving average crossover." "But this is not a daunting task, as the curve points downward. If the positive sentiment develops, the bulls' target seems to be the $2,700 area, which was the high point at the end of September."According to TradingView analyst Xanrox, "Bitcoin is almost ready to start a new, and also the last huge upward wave!"
He has set a target of $130,000, but warned that the arrival of the cryptocurrency winter will eventually bring the price of King crypto back to $60,000, and it would be wise for traders to cash out at the peak.
He pointed out: "We all know that Bitcoin is very volatile, and a 70%-80% drop is standard during a bearish cycle." "We can confidently anticipate a plunge from $130,000 to $60,000 in the next bearish cycle, to retest the current bullish signal (which you can see on the chart). This is why it's very important for you to take profits and possibly enter a long-term futures short position!"
"Why is $130,000 important?" he asked. "First, we have the 0.618 Fibonacci extension, measured from wave 1+3->wave 4. Additionally, we also have the long-term trendline of this bullish cycle, which is a stronger dynamic resistance!"
"From the perspective of Elliott waves, we need to complete this impulse wave and make the last wave reach 5!" Xanrox said. "The fifth wave has already started at 49,000 in August. On the chart, we can see two main consolidation periods, marked as the second and fourth waves."
He concluded: "The best plan for Bitcoin is to buy and sell around $130,000, then establish a short position in futures to make money in the next bearish cycle." "You will also receive funding fees for holding a short position!"
Currently, Bitcoin is trading at $66,103, up 5.78% on the 24-hour chart.