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Profit-taking and peril: Equities consolidate, bonds turn hawkish, and Bitcoin tests its limits

Profit-taking and peril: Equities consolidate, bonds turn hawkish, and Bitcoin tests its limits

The past week has seen a noticeable retreat in global risk appetite, with traders and institutional investors adopting a more cautious stance ahead of the third-quarter earnings season. This consolidation phase reflects a natural pause following a strong rally in equities, with market participants reassessing valuations and positioning themselves for potential volatility once corporate earnings reports begin to roll in.

US equities closed lower on Thursday, with the Dow Jones Industrial Average shedding 0.5 per cent, the S&P 500 down 0.3 per cent, and the Nasdaq Composite slipping 0.1 per cent. These modest declines underscore a broader theme of profit-taking rather than panic selling, suggesting that the market remains fundamentally sound but increasingly selective.

Adding to the uncertainty, key US economic data releases have been disrupted by the ongoing government shutdown. Weekly jobless claims and wholesale trade figures, initially scheduled for Thursday, remain delayed, depriving analysts of timely insights into labour market resilience and inventory trends. Market attention now shifts to Friday’s release of the University of Michigan’s preliminary consumer sentiment index for October.

Given that consumer confidence often serves as a leading indicator of spending behaviour and economic momentum, this report could significantly influence near-term market direction, especially if it reveals a sharp deterioration in household outlooks amid persistent inflation concerns or rising borrowing costs.

Meanwhile, the bond market continues to reflect a nuanced outlook on monetary policy. US Treasury yields edged higher, with the benchmark 10-year yield climbing 2.1 basis points to 4.138 per cent and the two-year yield rising 1.2 basis points to 3.593 per cent. The modest uptick in yields suggests that investors are recalibrating expectations for future Federal Reserve rate cuts, possibly in response to resilient economic data or hawkish commentary from central bank officials. This dynamic places additional pressure on equities, particularly growth-oriented sectors that are sensitive to higher discount rates.

Currency and commodity markets also mirrored the prevailing risk-off mood. The US Dollar Index strengthened by 0.6 per cent to reach 99.54, benefiting from its traditional safe-haven status during periods of market caution. Conversely, gold retreated 1.6 per cent to US$3976 per ounce after briefly touching a record high.

The pullback in the precious metal appears driven by profit-taking rather than a fundamental shift in its appeal as a hedge against uncertainty. Similarly, Brent crude oil settled 1.6 per cent lower at US$65.22 per barrel, pressured by easing geopolitical tensions in the Middle East and the broader retreat from risk assets.

In Asia, equity markets displayed a mixed performance. The Chinese CSI 300 index surged 1.48 per cent on Thursday, its first trading day following the week-long National Day holiday. The rally was led by sectors tied to artificial intelligence and gold, reflecting both domestic policy optimism and global commodity trends.

However, early trading sessions on Friday showed more subdued activity, indicating that the initial post-holiday euphoria may be giving way to more cautious positioning. Notably, US equity index futures point to a higher open on Wall Street, suggesting that the recent dip may have created attractive entry points for bargain hunters.

Amid this backdrop, Bitcoin has emerged as a focal point of intense speculation and technical scrutiny. The cryptocurrency is currently trading above US$121,000, yet it faces mounting bearish pressure that could trigger a test of critical support levels. On Thursday, Bitcoin briefly dipped below the psychologically important US$120,000 mark, reaching an intraday low of US$119,810 before recovering slightly. This move, which represented a nearly three per cent decline in a single session, highlights the asset’s vulnerability despite its lofty valuation. Technical indicators reinforce this cautionary tone.

The hourly chart reveals a developing bearish trend line, with resistance forming around US$122,750. Bitcoin now trades below both the US$121,500 level and its 100-hour Simple Moving Average, signalling weakening short-term momentum. Immediate resistance sits at US$121,750, while the hourly MACD shows increasing strength in negative territory and the RSI has fallen below the pivotal 50 level, both classic signs of bearish dominance.

The derivatives market further underscores this fragile sentiment. Total derivatives volume plummeted by 15.24 per cent to US$478.15 trillion, while open interest in perpetual contracts declined by 1.29 per cent. This contraction coincided with Bitcoin’s drop below US$124,000 and triggered approximately US$700 million in liquidations.

The high leverage embedded in the system, evidenced by open interest standing at US$1.12 trillion, amplified the downside as leveraged positions were forcibly unwound. Traders appear to be reducing exposure in response to stretched technical conditions, with the 14-day RSI hovering near 69.88, just shy of overbought territory. Moreover, the spot-to-perpetuals trading ratio of 0.22 indicates that derivatives activity continues to dominate the market, rendering it especially susceptible to sharp swings and cascading liquidations.

Compounding Bitcoin’s challenges, the altcoin ecosystem is experiencing its own wave of selling pressure. New token launches such as ASTER and MIRA have faced immediate post-listing declines, driven by large-scale airdrops and token unlocks. ASTER’s Phase 2 airdrop released four per cent of its total supply, prompting whales to offload 28.3 million tokens and driving the price down by 10 per cent.

Similarly, MIRA’s circulating supply surged by 191 million tokens following its Binance listing, overwhelming market demand. These events highlight a recurring pattern in the crypto space: token unlocks often lead to immediate sell-offs, particularly when projects lack robust utility or sustainable demand drivers. The Altcoin Season Index has consequently fallen by 11.76 per cent, signalling a clear rotation of capital back into Bitcoin as investors seek relative safety within the digital asset class.

Regulatory uncertainty adds another layer of complexity. In the United States, Senate negotiations on comprehensive crypto market-structure legislation have stalled, with Democratic proposals on decentralised finance (DeFi) oversight meeting resistance from Republican lawmakers. This legislative gridlock prolongs the regulatory limbo that has long plagued the industry, creating headwinds for institutional adoption and altcoin valuations.

However, there remains a counterbalancing bullish narrative. Former President Donald Trump’s recent overtures toward establishing a US strategic Bitcoin reserve have reignited speculation about potential pro-crypto policies should he return to office. While purely aspirational at this stage, such rhetoric provides a psychological floor for long-term Bitcoin bulls who view regulatory clarity, even if delayed, as inevitable.

In sum, the current market environment reflects a delicate equilibrium between optimism and caution. Equities are consolidating after a strong run, bonds are pricing in a more hawkish Fed, and commodities are reacting to shifting risk sentiment. Bitcoin, despite its record-breaking price, shows clear signs of technical fatigue and structural vulnerability.

Yet, beneath the short-term turbulence lies a persistent belief in its long-term potential, particularly if it can overcome key resistance levels and navigate the evolving regulatory landscape. For now, investors remain in a holding pattern, awaiting the next catalyst, whether from corporate earnings, economic data, or policy developments, to determine the next major market move.

 

Source: https://e27.co/profit-taking-and-peril-equities-consolidate-bonds-turn-hawkish-and-bitcoin-tests-its-limits-20251010/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

The new market symbiosis: How Fed easing, AI, and crypto ETFs are lifting equities

The new market symbiosis: How Fed easing, AI, and crypto ETFs are lifting equities

As markets wrapped up trading on Monday, September 30, 2025, investors witnessed a steady climb in major indices, driven by ongoing negotiations in Congress to prevent a government shutdown. Traders focused on these developments, which injected a dose of optimism into the session.

The Dow Jones Industrial Average climbed 69 points, marking a 0.2 per cent increase. Meanwhile, the S&P 500 advanced 0.3 per cent, and the Nasdaq Composite led the pack with a 0.5 per cent gain. This upward movement highlighted a resilient market mood, even amid earlier fluctuations that tested investor resolve.

Earlier in the day, the Dow showed signs of recovery after a choppy start. It ended up 32 points, or 0.1 per cent, despite spending much of the session in negative territory. This modest rebound came as 18 out of the 30 component stocks turned positive, indicating solid breadth across the index. Such participation from a majority of its members suggested underlying strength, rather than a rally propped up by just a handful of heavyweights.

The S&P 500, for its part, held firm in positive ground throughout, rising 0.2 per cent by early afternoon. It experienced several ups and downs, reflecting the push and pull between buyers and sellers, yet it never dipped into the red for long.

The Nasdaq Composite’s 0.5 per cent advance stood out, fuelled by renewed interest in artificial intelligence-related names and the broader Big Tech sector. This dip-buying behaviour explained much of the divergence, as tech enthusiasm lifted the index while others lagged slightly.

The Dow faced headwinds mid-session, slipping 45 points or 0.1 per cent after an initial pop higher. Only 14 of its 30 stocks gained ground at that point, underscoring its relative underperformance compared to peers. Unlike the Nasdaq or S&P, the Dow carries fewer pure-play AI and tech exposures, and it prices its components by share value rather than overall market capitalisation. This structure amplified the drag from laggards.

Notably, Apple, one of the Dow’s key holdings, traded lower despite its recent strong run, which further weighed on the index. In contrast, the Nasdaq benefited from its heavier tilt toward innovative sectors, where investors scooped up shares on any weakness, perpetuating the rally in tech darlings.

Shifting focus to broader influences, several macroeconomic tailwinds and regulatory advancements played a pivotal role in bolstering sentiment. The Federal Reserve’s rate cut in September, which brought the target range to 4.00 per cent to 4.25 per cent, eased borrowing pressures across the economy. Coupled with this, the GENIUS Act streamlined rules for exchange-traded funds, enhancing liquidity prospects.

The Securities and Exchange Commission approved ETFs for alternative coins and unified derivatives regulations, which cleared away much of the fog surrounding crypto investments. These steps actively drew in more capital from institutions, fostering a positive spillover into equities. Crypto’s seven-day correlation to the Nasdaq 100 stood at +0.72, illustrating how shared economic drivers linked these assets.

Investors now anticipate the SEC’s October 10 deadline for approving a Solana ETF, with analysts pegging the odds above 95 per cent. This potential green light could further integrate digital assets into traditional portfolios, amplifying the bullish momentum seen in stocks.

Binance’s recent initiatives added another layer of institutional momentum to the mix. The exchange introduced a white-label platform allowing banks and brokerages to integrate crypto offerings seamlessly, echoing a similar launch by Coinbase in June. This development sparked a sharp uptick in activity, with spot trading volume surging 58.47 per cent over 24 hours and derivatives volume jumping 77.41 per cent.

Such increases pointed to heightened engagement from professional players, bridging the gap between traditional finance and digital assets. Tokens like BNB rose 3.78 per cent, while Mantle climbed 7.41 per cent, buoyed by corporate adoptions such as CEA Industries’ US$160 million purchase of BNB for its treasury.

These moves signalled growing confidence in crypto as a viable reserve asset. Looking ahead, Binance’s full rollout of this service in the fourth quarter will serve as a crucial gauge for enduring demand from institutions, potentially sustaining the uplift in related equities.

On the technical and on-chain front, the picture presented a blend of encouraging and cautionary signals. BNB’s Maxwell hard fork reduced block times to 0.75 seconds, accelerating network efficiency and spurring greater usage. Bitcoin’s market dominance edged up to 58.05 per cent, hinting at a shift toward established large-cap cryptos amid uncertainty.

Total open interest in crypto reached US$1.14 trillion, up 9.66 per cent in the last 24 hours, which underscored robust speculative interest. However, the MACD histogram dipped to -10.59 billion, flagging potential overheating in derivatives markets. This duality captured the market’s current state: enthusiasm tempered by risks of excess leverage.

In my opinion, this Monday’s market action marks a turning point where policy easing and innovation converge to propel assets higher, albeit with vulnerabilities. I view the Fed’s dovish stance as a foundational support, lowering costs and encouraging risk-taking that benefits both stocks and crypto. The rate cut directly contributes to improved liquidity, which in turn supports the Nasdaq’s outperformance through investments in AI and tech.

Regulatory clarity, especially around ETFs and derivatives, removes barriers that once deterred big money, and the high odds for Solana’s approval excite me as a catalyst for fresh inflows. Binance’s push feels like a game-changer, actively pulling traditional finance into the fold and driving those volume spikes that ripple into broader markets. The corporate buys, like CEA Industries’ sizable BNB stake, convince me that we’re seeing real adoption, not just hype.

I remain watchful of the mixed technicals. The rise in Bitcoin dominance suggests investors favor safety in giants, which could cap gains in smaller names and indirectly pressure diversified indices like the S&P. The open interest boom is thrilling, but that negative MACD reading worries me about overextension in derivatives, where unwinds could spark volatility. Spot ETF assets under management at US$147.75 billion provide a buffer, yet if leverage risks escalate, they might not hold the line.

Overall, I lean bullish, believing macro tailwinds and institutional integration outweigh the froth. The Dow’s recovery, with 18 components advancing, reassures me of broad participation, while the Nasdaq’s 0.5 per cent gain highlights sector leadership. If Congress averts the shutdown, this could extend the grind higher.

 

Source: https://e27.co/the-new-market-symbiosis-how-fed-easing-ai-and-crypto-etfs-are-lifting-equities-20250930/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

The Fed’s first rate cut: What it means for equities, risk, and crypto

The Fed’s first rate cut: What it means for equities, risk, and crypto

The Federal Reserve has officially initiated its rate cut cycle, a move long anticipated by markets that have already priced in approximately 3.8 cuts over the next 12 months. I forecast two additional reductions on October 29 and December 12.

Historically, the period immediately following the first rate cut has been marked by heightened volatility as markets recalibrate their expectations, reassess risk premiums, and digest the implications of a new monetary regime.

This transitional phase is particularly delicate because it often coincides with divergent signals from economic data, political uncertainty, and evolving investor positioning. All of these factors are present in today’s environment.

Equities and the magnificent seven effect

Equity markets, led by the S&P 500’s impressive 32 per cent rally from its recent lows, reflect a strong recovery narrative driven disproportionately by the so-called Magnificent Seven (Mag7) stocks. These technology and growth-oriented giants continue to post earnings growth roughly four times that of the remaining 493 companies in the index, underscoring their outsized influence on overall market performance.

However, this concentration introduces significant risk. Mag7 valuations now exceed 30 times forward earnings, not yet at their historical peaks but certainly in elevated territory. While historical backtesting suggests that equities generally perform well in the 12 to 24 months following the start of a Fed easing cycle, the current context differs in important ways.

The market’s narrow leadership, combined with stretched valuations, makes indiscriminate exposure to these names increasingly perilous. Chasing performance at this juncture could expose investors to sharp corrections if earnings disappoint or if macro risks materialise. Diversification, not just across sectors but across geographies and asset classes, emerges as a critical defensive and offensive strategy.

Investor positioning and market signals

Investor positioning data reveals that asset managers hold high equity allocations, though not at extreme levels that typically precede major drawdowns. Meanwhile, equity volatility remains subdued, a condition that historically correlates with lower forward returns over the subsequent six to twelve months.

This low-volatility complacency can lull investors into underestimating tail risks, especially when other asset classes also appear expensive. Gold, for instance, has seen renewed inflows into bullion-backed ETFs and now trades near US$3,760 per ounce, supported by geopolitical tensions and a modestly weaker US dollar, which closed at 98.152.

Yet gold positioning is once again crowded, suggesting limited room for further upside without a significant catalyst such as a sharp escalation in global instability or a deeper-than-expected economic slowdown. Similarly, credit markets show tight bond spreads, indicating that investors are not demanding much compensation for credit risk. In such an environment, security selection becomes paramount.

Broad exposure to high-yield or investment-grade debt may not suffice. Instead, bottom-up analysis of issuer fundamentals is essential.

Mixed economic signals and political risks

The macroeconomic backdrop offers mixed signals. August’s Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, rose 0.3 per cent month-over-month, resulting in a 2.7 per cent annual headline rate. Core PCE, which excludes food and energy, stood at 2.9 per cent year-over-year after a 0.2 per cent monthly increase.

This remains above the Fed’s two per cent target but shows signs of gradual moderation. The data came in largely in line with expectations and did not provoke a strong market reaction, suggesting that investors have already internalised a path of gradual disinflation. However, political risks loom large.

The September 30 deadline for US government funding is fast approaching, and with congressional negotiations stalled, the probability of a partial shutdown is rising. While past shutdowns have had limited economic impact, they inject uncertainty into market psychology and could delay fiscal policy decisions or data releases, further complicating the Fed’s communication strategy.

Wall Street’s reaction and treasury yields

Market reactions to recent events have been muted but telling. Wall Street closed higher last Friday, ending a three-day losing streak, with the Dow Jones up 0.7 per cent, the S&P 500 gaining 0.6 per cent, and the Nasdaq rising 0.4 per cent.

Notably, markets barely flinched at the announcement of new sector-specific tariffs by the Trump administration, signalling either desensitisation to trade rhetoric or confidence that such measures will not significantly disrupt the broader economic trajectory. Treasury yields reflected this calm.

The 10-year yield edged up just one basis point to 4.183 per cent, while the two-year yield dipped two basis points to 3.645 per cent, flattening the yield curve slightly. This dynamic suggests that while near-term rate expectations are stable, longer-term growth and inflation concerns persist.

Asia’s cautious mood and key data ahead

In Asia, equities dipped on Friday as resilient US data prompted a modest reassessment of rate cut expectations. US equity index futures point to a higher open, indicating that global investors remain cautiously optimistic. The coming week will be pivotal, with the September nonfarm payrolls report on October 3 serving as a key barometer of labor market health.

Additional insights will come from the JOLTS job openings data on Tuesday and the ADP private payroll report on Wednesday. Labour market strength remains the Fed’s primary concern. If employment data remains robust, it could delay further rate cuts or reduce their magnitude, directly impacting risk asset valuations.

Bitcoin’s technical recovery

Meanwhile, Bitcoin has staged a “reasonable” technical recovery, rising 2.24 per cent in the past 24 hours to US$111,966 after a 7-day decline of 2.23 per cent. This rebound appears driven by three converging factors. First, price action held firm at the US$108,680 support level, breaking a bearish trend line and reclaiming the US$111,000 mark.

Hourly indicators, including a bullish MACD crossover and an RSI stabilising around 47-48, suggest that short-term momentum has shifted in favour of buyers. The 200-day exponential moving average at US$106,200 continues to act as a structural support, reinforcing the asset’s resilience.

However, the critical test lies ahead. A sustained close above US$112,500, the 50 per cent Fibonacci retracement of the recent decline, could pave the way for US$113,700 to US$115,000. Failure to break this resistance may invite profit-taking and a retest of the lower support level.

On-chain metrics and corporate adoption

Second, on-chain metrics show improving demand dynamics. The 60-day Buy/Sell Pressure Delta has entered what analysts describe as an opportunity zone, indicating reduced selling pressure.

The decline in sending addresses and stable miner reserves, holding steady at 1.8 million BTC, suggests that long-term holders are not capitulating. That said, the 90-day delta remains cautious, reflecting lingering uncertainty among larger participants. The Coinbase Premium Index, currently at +0.041, will be a key gauge of sustained US institutional interest.

Third, corporate adoption continues to provide narrative support. The rebranding of 164-year-old Japanese textile firm Marusho Hotta to Bitcoin Japan and its announcement of a BTC treasury business, while small in absolute scale, aligns with a growing trend among Asian corporations seeking alternative stores of value amid declining traditional revenues.

Firms like Metaplanet and Kitabo have similarly adopted Bitcoin, reinforcing its digital gold thesis in a region that is increasingly skeptical of fiat stability.

Final thoughts: Selectivity over momentum

In sum, the current market environment demands a nuanced approach. While the Fed’s pivot to easing should, in theory, support risk assets over the medium term, the combination of expensive valuations, narrow market leadership, and external risks ranging from a potential government shutdown to geopolitical flare-ups calls for disciplined selectivity.

Investors should avoid chasing momentum in already crowded trades and instead focus on quality earnings, global diversification, and tactical entry points during pullbacks.

 

Source: https://e27.co/the-feds-first-rate-cut-what-it-means-for-equities-risk-and-crypto-20250929/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j