Bitcoin surges, bullish sentiment rises in the second half of October

This week, the cryptocurrency market experienced a strong rebound, with bullish sentiment in the market continuing to rise as October approaches. Meanwhile, the impressive Q3 earnings reports from U.S. banks drove the three major U.S. stock indices to collectively rise, indicating a clear recovery in investor risk appetite. The U.S. dollar, bolstered by hawkish comments from the Federal Reserve, reached new highs, putting pressure on commodities.

Bitcoin Soars! Harris to Support Regulatory Framework for Cryptocurrencies

On Tuesday, the cryptocurrency market saw a widespread increase, with Bitcoin reaching a high of $66,330, the highest in two weeks; Ethereum rose by 6.8%, trading at $2,654, approaching the September 27 high of $2,728. The crypto sector in U.S. stocks also experienced a broad rally, with Microstrategy rising over 5% and Coinbase nearly 5%.

In news, U.S. presidential candidate Harris pledged to support a regulatory framework for cryptocurrencies, boosting market sentiment and adding to the optimism that had already emerged during the Asian trading session. Previously, the crypto industry had complained that U.S. officials chose to regulate through enforcement rather than providing clear regulations. Trump actively courted cryptocurrency voters in his presidential campaign and has multiple plans related to cryptocurrencies. Harris's latest commitment can be seen as a response to the cryptocurrency industry.

Additionally, the Mt. Gox cryptocurrency exchange postponed the deadline for repaying creditors of its remaining assets by a year, alleviating concerns about a potential oversupply from creditors selling returned Bitcoin.

Bitcoin had a poor start in October, but historically, it has averaged a 20% increase in October over the past decade. However, historical data indicates that the seasonal strength of the cryptocurrency market in October typically concentrates in the latter half of the month. As Bitcoin rose earlier this week and briefly surged above $66,000, market sentiment gradually became optimistic.

U.S. Stock Indices Close Higher

As the Q3 earnings season kicks off, the strong performance of the U.S. banking sector reignited investor risk appetite, driving U.S. stocks higher. On Monday, the three major U.S. stock indices closed higher, with the Dow Jones up 0.47%, the S&P 500 rising 0.78%, both hitting new highs, and the Nasdaq up 0.87%, with Nvidia reaching a new closing high, nearing Apple's market capitalization.

With the arrival of Q3 earnings reports, the banking sector was the first to release its results, with JPMorgan, Wells Fargo, and BlackRock all exceeding revenue and profit expectations, potentially setting a solid tone for the earnings season. Analysts believe that the optimism in the market stems partly from the diminishing negative impact of declining interest rates on investment bank loan revenues and partly from the banks' profitability reflecting economic expectations at a micro level. The performance of the U.S. banking sector can reflect economic resilience, and investors are looking for signs that the U.S. economy will achieve a soft landing.

Federal Reserve Officials "Hawkish," Dollar Hits Two-Month High

On Monday, some Federal Reserve officials made hawkish comments, leading to a slight increase in the dollar, which reached a new high in over two months. As of the time of writing, the dollar index, which measures the dollar against six major trade-weighted currencies, was at 103.32, roughly unchanged from the previous day.

Federal Reserve Governor Waller expressed caution regarding further rate cuts in the coming months, citing the recent resilience of the U.S. economy and persistent inflation. Currently, according to the Federal Reserve's interest rate monitoring tool, traders expect an over 80% chance of a 25 basis point rate cut in November.

Commodities Under Pressure, Gold and Oil Prices Decline

The dollar's continued rise to a two-month high put pressure on commodities, with gold prices retreating after hitting a daily high of $2,666 per ounce on Monday, closing down 0.31%. Since the beginning of this year, international gold prices have surged over 28%. In the oil market, OPEC has lowered its oil demand forecast for the third consecutive time, causing oil prices to drop over 2% during the session and dragging down energy stocks. Reports late in the session indicated that Israel does not plan to strike Iran's oil and nuclear targets, causing oil prices to briefly extend their decline to nearly 5%.

Recent bullish sentiment and rising risk appetite in the financial markets have been evident, but investors still need to remain cautious. The U.S. presidential election in three weeks may bring new uncertainties to the market, and the pace and extent of the Federal Reserve's policy easing remain unclear. Additionally, the potential escalation of geopolitical risks in the Middle East adds more uncertainty to the market. In this complex backdrop, market risks persist. eeee.com is a financial trading platform that supports cryptocurrencies, stock indices, commodities like gold, and foreign exchange, recently launching a USDT stablecoin investment product with an annualized return of 5.5%, providing investors with potential hedging options. 4E reminds you to pay attention to market volatility risks and allocate assets wisely.