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From shutdown to surge: How macro relief is lifting crypto and equities

From shutdown to surge: How macro relief is lifting crypto and equities

Equity markets hover at critical technical junctures while macroeconomic headwinds, particularly the spectre of a prolonged US government shutdown, have only just begun to recede. Cryptocurrency markets, deeply intertwined with broader risk sentiment, have rebounded modestly, buoyed by improved macro conditions and renewed institutional interest in Layer 1 infrastructure. Beneath the surface, divergences in both traditional and digital asset markets suggest that the current calm may be temporary and highly contingent on incoming data, policy developments, and capital flows that remain in flux.

Equity markets continue to tread carefully around key technical support levels. The S&P 500, a bellwether for global investor sentiment, finds itself sandwiched between its 50-day and 100-day moving averages, zones that often act as fulcrums between continuation and reversal. Although recent price action has been subdued, the possibility of a year-end rally persists, especially given the surprisingly strong third-quarter earnings results that delivered a 15 per cent year-over-year profit growth across the index. This strength is increasingly concentrated and increasingly fragile.

The so-called Magnificent 7, once a monolithic engine of market returns, now exhibit stark performance divergence. Tesla, emblematic of this fragmentation, encapsulates the broader uncertainty. Analyst forecasts span from bullish projections of a 6x price surge to bearish scenarios anticipating steep corrections. Such volatility in outlook underscores a market increasingly sceptical of uniform growth assumptions and more attuned to company-specific fundamentals, execution risk, and macro dependencies.

This skepticism is well-founded. While optimism around artificial intelligence remains intact, particularly in the context of long-term structural transformation, the near-term outlook for capital expenditure shows signs of potential deceleration. The year 2026 may witness a slowdown in AI-related capex, especially in downstream sectors where valuations appear stretched relative to near-term revenue visibility.

Compounding this risk is the fact that many of the Magnificent 7 remain deeply tethered to consumer behavior, whether through digital advertising, cloud services, or hardware sales. Should broader economic conditions falter, driven by persistent inflation, tighter credit conditions, or geopolitical shocks, their vaunted cash flow strength could erode faster than anticipated. Investors would be wise to adopt a selective approach, distinguishing between companies with resilient business models and those riding speculative momentum.

Currency markets add another layer of complexity. The US Dollar Index (DXY), which had been testing the psychologically significant 100 level, pulled back slightly to 99.60 following news of a Senate resolution to end the 40-day government shutdown. The dollar remains strong, and positioning appears crowded. Such crowding increases the risk of sharp reversals should upcoming macro data or, more likely, signals from the Federal Reserve shift market expectations. A stronger dollar typically acts as a headwind for US multinational earnings and emerging market assets alike, and its influence on capital flows cannot be overstated. In the context of crypto, where dollar strength often inversely correlates with asset prices, this dynamic remains a critical variable.

Global themes further complicate the narrative. China’s strategic push into humanoid robotics, exemplified by XPENG’s IRON project, signals a broader ambition to dominate next-generation industrial and consumer technologies. Simultaneously, Chinese companies are accelerating overseas expansion, challenging incumbents in markets from Southeast Asia to Latin America. India, by contrast, has underperformed relative to both China and Japan, raising questions about its near-term growth inflexion and policy responsiveness. In such an environment, a barbell strategy, combining exposure to large-cap growth leaders with defensively positioned, dividend-paying equities, offers a prudent approach to navigating regional and sectoral divergences.

The macro backdrop improved meaningfully over the weekend with the Senate’s bipartisan agreement to end the government shutdown, the longest in US history. This resolution directly addresses a significant source of liquidity drain. Since October 10, approximately US$700 billion in economic activity has been disrupted or delayed, constraining both consumer and institutional risk appetite. With the shutdown concluded, capital can begin to reallocate toward risk assets, a dynamic already reflected in the 4.83 per cent 24-hour gain in crypto markets following a 3.94 per cent weekly loss. Bitcoin’s 0.70 seven-day correlation with the S&P 500 underscores how tightly crypto remains linked to traditional market sentiment. Relief in one arena quickly transmits to the other.

Layer 1 ecosystems have emerged as a focal point of this renewed optimism. Solana’s 4.42 per cent sector gain was catalysed by Western Union’s announcement that it will launch a US dollar stablecoin exclusively on Solana in the first quarter of 2026. This is not a speculative foray but a strategic institutional endorsement of Solana’s scalability and throughput.

Similarly, Ethereum received a significant vote of confidence through EigenCloud’s US$200 million deployment of ETH-based infrastructure to support AI systems. These developments indicate that blockchain is no longer merely a speculative playground but an operational backbone for real-world financial and technological infrastructure. Institutional adoption of this magnitude validates the long-term utility of high-performance Layer 1 networks and draws capital toward ecosystems demonstrating clear use cases and execution capability.

Technically, the crypto market rebounded from oversold territory, with the 14-day RSI at 37.4 signalling exhaustion among sellers. Bitcoin retested its 50-week moving average near the US$103,000 level, a zone that often acts as a magnet for price action. Spot trading volume rose 14 per cent to US$159 billion, while derivatives open interest climbed 5.76 per cent, suggesting that traders are cautiously re-engaging.

This optimism remains tempered. Ethereum ETFs recorded US$466 million in outflows on November 7 alone, highlighting persistent institutional scepticism toward ETH despite its technological advancements. Moreover, the market must sustain a close above the seven-day simple moving average at US$3.46 trillion in total market cap to confirm bullish momentum. Failure to do so could trigger a retest of the US$3.37 trillion Fibonacci support level.

Gold’s rise to US$4,007 per ounce amid dollar softening and shutdown-related uncertainty further illustrates the fragile nature of current sentiment. Safe-haven demand remains elevated, even as risk assets rally. This duality, bullish price action coexisting with defensive positioning, is a hallmark of late-cycle or transitional market regimes.

Whether Bitcoin can hold above US$105,000 in this environment depends not only on technicals but on broader macro confirmation. Sustained liquidity normalisation, stable dollar conditions, and continued institutional validation of blockchain infrastructure must all align. Until those pillars solidify, the relief rally, while welcome, should be approached with disciplined risk management and selective exposure.

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

S&P 500 eyes 7000, gold at US$4113, Bitcoin breaks US$115K: Here’s what’s driving the surge

S&P 500 eyes 7000, gold at US$4113, Bitcoin breaks US$115K: Here’s what’s driving the surge

The S&P 500, currently trading in the high 6700s as of late October 2025, hovers just below the psychologically significant 7000 threshold. A credible and durable US-China trade agreement could propel the index toward that level by year-end, a move representing a 2.8 per cent upside from current levels.

Such optimism remains contingent on tangible outcomes rather than mere rhetoric. The market’s advance hinges not only on macro diplomacy but also on the micro-level performance of 177 companies reporting earnings this week. Only consistent beat-and-raise guidance, where firms exceed earnings expectations and raise forward-looking forecasts, will sustain the fragile momentum. Without such confirmation, the rally risks unravelling under the weight of its own narrow breadth and elevated leverage.

Gold continues to serve as a strategic hedge amid rising macro uncertainty. Technical analysis points to structured accumulation zones at 3700 dollars and 3500 dollars, levels that have repeatedly attracted institutional and algorithmic buying. Despite an environment of loose monetary conditions and accelerating inflation expectations, correlated at plus 28 per cent with M2 money supply growth, portfolio allocations to gold remain strikingly low.

Only 2.4 per cent of fund managers hold more than five per cent of their assets in gold, suggesting significant room for reallocation if inflation proves persistent or if geopolitical tensions escalate. The metal’s recent consolidation near US$4113 per ounce reflects this tension between fundamental tailwinds and tepid institutional demand, a divergence that often precedes sharp re-pricing.

China’s evolving economic strategy adds another layer of complexity. The 15th Five-Year Plan for 2026 to 2030 formally pivots away from the old growth model centred on property and infrastructure toward human capital development and domestic consumption. This shift is more than semantic. The term consumption appears four times in the latest Communist Party Plenum Communiqué, compared to just once in 2020, signalling a deliberate policy recalibration.

Property, once the engine of Chinese growth, remains under regulatory scrutiny and is unlikely to receive meaningful stimulus, especially as exports continue to outperform. Instead, Beijing prioritises technological self-reliance and innovation, aiming for a sustainable 4.5 per cent annual growth rate through productivity gains rather than debt-fuelled asset bubbles. For global investors, this transition implies that Chinese equities may offer value but with heightened volatility tied to policy execution and external trade dynamics.

The US equity market, in contrast, has become increasingly concentrated. Performance is now effectively a binary bet on the success of artificial intelligence monetization within the MAG7 cohort, those mega-cap tech firms generating multi-billion-dollar free cash flows. Public AI plays appear safer than their private counterparts, like OpenAI or Anthropic, which remain unprofitable and lack a clear killer app to justify their valuations.

Even among public firms, the path to AI-driven revenue remains elusive. This narrow leadership amplifies systemic risk, particularly as leveraged ETFs magnify both upside and downside moves. A barbell strategy, pairing large-cap growth exposure with high-dividend yield stocks, remains prudent, especially when considering Japan’s continued commitment to Abenomics 3.0 under Prime Minister Takaichi, which supports regional diversification.

This week’s volatility triggers are unusually dense. Beyond the FOMC decision and Big Tech earnings, markets must navigate Donald Trump’s visit to Asia, Jensen Huang’s keynote at a major AI conference, and most critically, the Trump-Xi bilateral meeting on October 30 during the APEC summit in South Korea. Early signals suggest progress.

Chinese officials report a preliminary consensus on export controls, fentanyl trafficking, and maritime levies. These incremental steps have already fuelled a cross-asset rally, with Asian equities up 1.5 per cent and US index futures pricing in a 0.6 per cent gap-up at the open. Copper and Brent crude have surged on improved global growth expectations, while the US Dollar Index holds steady at 98.95, reflecting balanced risk sentiment.

The crypto market has surged in tandem, rising 3.62 per cent in 24 hours and 5.91 per cent over the week. This move stems from three reinforcing narratives. First, macro liquidity expectations have intensified as US bank reserves at the Federal Reserve declined to 2.93 trillion dollars, the lowest level since early January, and what analysts like Adam Livingston describe as nearing a danger zone. Historically, such reserve contractions in 2019, 2020, and 2023 preceded Fed interventions and sharp Bitcoin rallies. Markets now price in a 96.7 per cent probability of a 25-basis-point rate cut at the October 28 to 29 FOMC meeting, reinforcing the liquidity pivot thesis.

Second, institutional demand is accelerating. South Korea’s Bitplanet has initiated daily Bitcoin purchases targeting 10,000 BTC, following Metaplanet’s earlier treasury move of 25,555 BTC. Simultaneously, US spot Bitcoin ETFs recorded over 600 million dollars in net inflows last week, drawing approximately 62,000 BTC from exchange cold storage and tightening supply dynamics. This absorption of available supply reduces float and increases scarcity, particularly as Bitcoin dominance dips slightly to 58.84 per cent, indicating capital rotation into altcoins like Ethereum, which gained six per cent against BTC.

Third, technical momentum has ignited a leverage reset. Bitcoin’s breakout above 115,000 dollars, a level confirmed by multiple sources, triggered 350 million dollars in short liquidations, forcing leveraged bears to cover positions rapidly. Open interest in derivatives markets has climbed 6.95 per cent to 903 billion dollars, reflecting renewed speculative activity. However, funding rates have spiked by 105 per cent in 24 hours, and the RSI sits at a neutral 47.49, suggesting the rally may pause for consolidation rather than accelerate further immediately.

In summary, today’s market environment reflects a delicate balance between hope and reality. Macro optimism, fueled by potential US-China détente and anticipated Fed easing, has aligned with institutional crypto accumulation and technical breakouts to drive risk assets higher. The sustainability of this move depends on concrete outcomes: a credible trade deal, consistent earnings beats, and actual monetary policy accommodation.

If the Fed under-delivers or corporate guidance falters, the leveraged nature of current positioning could trigger a sharp reversal. Investors should monitor Bitcoin’s 113,500 dollar support and Ethereum’s 4,000 dollar level as near-term barometers of sentiment. The week ahead will not merely test market resilience. It will define the narrative for the final quarter of 2025.

 

Source: https://e27.co/sp-500-eyes-7000-gold-at-us4113-bitcoin-breaks-us115k-heres-whats-driving-the-surge-20251027/

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

Survive the chop, ride the wave: Why Q4 could deliver a surge in tech and digital assets

Survive the chop, ride the wave: Why Q4 could deliver a surge in tech and digital assets

Recent announcements from major tech players, such as NVIDIA’s massive commitments to OpenAI and Intel, have sparked widespread enthusiasm about AI’s potential to drive economic growth. These deals, totalling over US$100 billion in some estimates, underscore a broader trend where companies pour resources into AI infrastructure, expecting transformative returns in efficiency and innovation.

This wave of investment has lifted equity markets, particularly in Asia and the US, where tech-heavy indices lead the charge. Investors see AI as a catalyst that could sustain rallies even amid economic uncertainties, fuelling a risk-on environment that extends beyond traditional stocks into commodities and digital assets.

Fed’s first rate cut of 2025

The Federal Reserve’s recent actions add another layer to this positive sentiment. Last week, the Fed lowered its benchmark rate by 25 basis points to a range of 4.00 per cent to 4.25 per cent, marking the first cut of 2025 and signalling a pivot toward easing. This move came after months of speculation, with markets pricing in the change well in advance.

In his post-meeting press conference, Chair Jerome Powell described the adjustment as a precautionary step to bolster the labour market, emphasising that inflation risks have diminished while employment concerns grow. He noted a curious balance in the job market, with unemployment at 4.3 per cent and slower job gains, but stressed that the cut aims to prevent further weakening without reigniting price pressures.

Today, Powell delivers another speech on the economic outlook, which traders anticipate will provide clues about the pace of future easing. His comments could either reinforce the bullish mood or introduce caution if he highlights persistent challenges like tariff impacts or global tensions.

Diverging voices within the Fed

Divergent views among Fed officials highlight the nuanced path ahead. Newly appointed Governor Stephen Miran, in his inaugural policy speech, argued forcefully that current rates remain overly restrictive, potentially risking higher unemployment if not lowered aggressively. Appointed by President Trump, Miran positions himself as an outlier, suggesting the benchmark rate sits far above neutral levels and calls for swift reductions to stimulate growth.

In contrast, St. Louis Fed President Alberto Musalem endorsed the recent 25-basis-point cut as a safeguard for the labor market but warned of limited scope for additional moves. He views the economy as resilient, with inflation trending toward the two per cent target, and advocates a measured approach to avoid overstimulating demand.

These contrasting stances reflect internal debates at the Fed, where the dot plot from the latest meeting shows a split on 2025 projections. Some officials foresee one more cut, while others expect two, but many anticipate a pause thereafter. Markets will scrutinise Powell’s remarks for resolution, as his guidance often sets the tone for asset prices.

Wall Street rides the momentum

Wall Street captured this optimism on Monday, extending its rally with tech stocks at the forefront. The Dow Jones Industrial Average rose 0.14 per cent, the S&P 500 climbed 0.44 per cent, and the Nasdaq advanced 0.70 per cent, reflecting broad-based gains driven by AI enthusiasm. Treasury yields ticked higher amid the Fed’s cautious rhetoric, with the 10-year note up 1.9 basis points to 4.147 per cent and the two-year yield increasing 3.1 basis points to 3.603 per cent.

This slight uptick suggests investors temper expectations for deep easing, focusing instead on balanced growth. The US dollar index slipped 0.31 per cent to 97.341, easing pressure on exports and commodities. Gold surged 1.7 per cent to a record US$3,746.70 per ounce, benefiting from sustained rate-cut bets and a weaker dollar.

Brent crude, however, dipped 0.2 per cent to US$66.57 per barrel, as oversupply fears overshadowed geopolitical risks in Russia and the Middle East. Asian equities showed mixed results on Monday but opened higher today, though Japanese markets closed for the Autumnal Equinox holiday. US futures point to a flat open, indicating a pause as participants await Powell’s insights.

Crypto pullback amid heavy liquidations

The cryptocurrency market presents a stark contrast, enduring a sharp pullback on Tuesday that erased recent gains. The total crypto market capitalisation fell two per cent to around US$3.9 trillion, with Bitcoin dropping toward US$112,000 amid heavy liquidations.

Over the past 24 hours, US$1.7 billion in positions liquidated, mostly longs, marking the year’s largest such event and accelerating the sell-off as leveraged trades unwound. Bitcoin traded down 1.8 per cent near US$112,561, Ethereum slid 3.3 per cent to US$4,197, BNB declined four per cent to US$991.3, and Solana tumbled 6.2 per cent to US$219.03. This downturn followed an initial boost from the Fed’s rate cut, which propelled altcoins over the weekend, but momentum faded quickly.

The announcement from the defunct FTX exchange about starting its third distribution of US$1.6 billion to claim holders on September 30 likely contributed to the cooling sentiment, as it introduces potential selling pressure from recipients cashing out. Despite the dip, macro signals remain supportive, with the Fed’s easing cycle expected to enhance liquidity and attract risk capital back into digital assets.

ETF inflows highlight institutional confidence

Bright spots emerge in crypto fund flows, offering a counterpoint to the volatility. Last week, spot Ethereum ETFs recorded US$556 million in net inflows, boosting total net assets to US$29.6 billion, according to data from SoSoValue. Spot Bitcoin ETFs drew US$886.6 million, elevating assets to US$152.31 billion.

These inflows, continuing a four-week streak totalling US$3.9 billion for crypto funds overall, demonstrate sustained institutional interest even as prices fluctuate. Bitcoin ETFs alone saw US$887 million in the week ending September 19, underscoring confidence in the asset as a hedge against traditional market risks.

Ethereum funds outperformed in some sessions, with US$307 million in one day, suggesting rotation toward alternatives as Bitcoin consolidates. This capital influx aligns with broader trends, where lower rates make yield-generating crypto strategies more appealing compared to fixed-income options.

Bitcoin’s role in corporate balance sheets

Corporate developments further illustrate Bitcoin’s growing role as a treasury asset. Strive, Inc. and Semler Scientific announced a merger in an all-stock deal, valuing Semler at a 210 per cent premium, or approximately US$90.52 per share, based on the closing prices of September 19.

Semler shareholders receive 21.05 Strive Class A shares each, combining their Bitcoin holdings into a post-merger treasury exceeding 10,900 coins. Strive added 5,816 Bitcoin at an average US$116,047 per coin, totalling 5,886, enhancing the entity’s balance sheet with digital reserves. Separately, Bitcoin miner CleanSpark expanded its credit facility with Coinbase Prime by US$100 million, backed by its holdings.

With a market cap of US$3.84 billion and shares up 48 per cent year-to-date, CleanSpark plans to use the funds for energy portfolio growth, mining expansion, and high-performance computing. CEO Matt Schultz highlighted the move as a step toward diversifying data centre uses, supported by a strong liquidity position with a current ratio of 4.37.

Outlook: Resilient but volatile

In my view, the current landscape points to a resilient yet volatile path forward for global markets. The Fed’s easing, coupled with AI-driven investment fervour, creates fertile ground for risk assets to thrive, potentially propelling equities and crypto to new heights in the fourth quarter.

Mixed Fed signals introduce short-term uncertainty. Miran’s aggressive stance could embolden bulls if adopted, while Musalem’s caution tempers over-exuberance. Crypto’s recent dip, fuelled by liquidations and FTX news, feels like a temporary flush amid strong ETF inflows and corporate adoption trends.

Companies like Strive and CleanSpark are treating Bitcoin as a core asset, signalling maturing institutional confidence, which could stabilise prices over time. Overall, I remain optimistic: survive the chop, and the liquidity wave from policy shifts might ignite a sustained bull run, rewarding those who position early in tech and digital innovations.

 

Source: https://e27.co/survive-the-chop-ride-the-wave-why-q4-could-deliver-a-surge-in-tech-and-digital-assets-20250923/

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