In a surprising turn of events, the cryptocurrency market has lit up like a Christmas tree, while the stock market played it cool and gold took a slight dip. All eyes are on the upcoming earnings reports from Wall Street’s heavyweights, with Goldman Sachs, Citi, and Bank of America set to drop their numbers today after market, followed by Morgan Stanley on Wednesday.
Stock Market: Steady as She Goes
David Morrison, Senior Market Analyst at Trade Nation, painted a picture of a resilient stock market. “The Dow and S&P 500 are flexing their muscles, hitting fresh record highs,” he noted. “We’re talking about the Dow flirting with 43,000 and the S&P 500 breaking the 5,800 barrier for the first time ever.”
It’s not just a flash in the pan, either. The major indices posted gains of around 1% last week, with the Dow on a five-week winning streak. This show of strength comes at a time when the market typically takes a breather, making it all the more impressive.
But it’s not all smooth sailing. The VIX, often called the “fear index,” has crept above 20, suggesting investors are hedging their bets with S&P put options. Meanwhile, bond yields are holding firm at higher levels, with the 10-year Treasury yield hovering around 4.10%, a significant jump from last month’s 3.60%.
Earnings Season: Off to a Flying Start
The third quarter earnings season has kicked off with a bang. JP Morgan, Wells Fargo, Bank of New York Mellon, and even Domino’s Pizza have all delivered positive reports. Only Delta Air Lines has hit some turbulence so far.
This week’s lineup is a who’s who of financial powerhouses, with Goldman Sachs, Citigroup, Bank of America, and Morgan Stanley all on deck. And let’s not forget about healthcare giant United Health and streaming king Netflix.
The Inflation Wild Card
Last week’s inflation data threw a curveball, with Core CPI ticking up unexpectedly. While the market is still betting on a 25 basis point rate cut from the Fed in three weeks, the odds of a pause in the rate-cutting cycle are creeping up. Any further signs of stubborn inflation or a surprisingly strong job market could throw a wrench in the works.
According to the CME FedWatch Tool, there’s still a 16% chance the Fed might just sit on its hands at the November meeting.
Crypto: The Comeback Kid
While the stock market was playing it cool, the crypto market was busy stealing the show. Bitcoin, the undisputed heavyweight champion of cryptocurrencies, climbed back above $66,000 for the first time since September 30, hitting a high of $66,321.
Alex Kuptsikevich, senior market analyst at FxPro, gave us the lay of the land: “The crypto market is sitting pretty at $2.23 trillion, roughly back to where it was a week ago. We’ve seen two growth spurts – one at the end of Thursday and another at the start of trading on Monday.”
The mood music in the crypto world has shifted from fear to neutral, with a sentiment score of 48. Meanwhile, the stock market is singing a tune of extreme greed.
Bitcoin’s latest move is particularly noteworthy. It broke above its 200-day moving average on Monday morning, echoing a similar move from last week that ultimately fizzled out. But this time feels different. With the optimism in equities and Bitcoin’s strong rally after dipping below $60K, Kuptsikevich is betting on further growth and a potential test of the $65K level.
Ethereum, not to be outdone, climbed to $2,500, picking up steam as it crossed its 50-day moving average. If the positive vibes continue, Kuptsikevich sees $2,700 as the next target for the bulls.
A Bold Prediction
TradingView analyst Xanrox is going all in, declaring that “Bitcoin is almost ready to start a new and last huge wave to the upside!” He’s set an eye-watering target of $130,000 but warns that what goes up must come down. He predicts a return to $60,000 when the next crypto winter hits.
“Bitcoin is like a roller coaster on steroids,” Xanrox explains. “During its bearish cycles, a 70% – 80% drop is par for the course. We’re talking about a potential crash from 130k to 60k in the next bearish cycle.”
His advice? Take profits when Bitcoin peaks and consider entering a long-term short position on futures.
Xanrox backs up his $130K prediction with some technical analysis mumbo jumbo involving Fibonacci extensions and Elliott Waves. But the gist is this: we’re in the final stretch of a major upward move that started back in August at $49K.
The Bottom Line
As of this writing, Bitcoin is trading at $66,103, up a whopping 5.78% in the last 24 hours. The crypto market is buzzing, the stock market is holding steady, and Wall Street’s biggest names are about to show their cards.
Whether you’re a stock market junkie, a crypto enthusiast, or just someone trying to make sense of it all, one thing’s for sure: the financial world is never dull. As we head into earnings season with the backdrop of a potential Fed rate cut and a surging crypto market, buckle up – it’s going to be one hell of a ride.
Acknowledgment: This article was inspired by and includes information from “Bitcoin bulls rally to $66k resistance, analyst says surge to $130k has begun” published on Kitco.com. For more detailed insights, you can read the full article here.
