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Powell's speech and government shutdown triggered volatility in the US stock market, while Bitcoin strongly maintained above $120,000 after the correction.
The U.S. federal government has entered its eighth day of shutdown, with Congress failing to pass a temporary funding bill, intensifying market concerns over economic recession and stagflation. Amid the uncertainty, the three major U.S. stock index futures fell broadly in Thursday morning trading. Market focus has completely shifted to Fed Chairman Powell's speech that day, as his remarks on interest rate cuts and the impact of the government shutdown will dominate October's market sentiment. Meanwhile, the Chinese stock market opened at a new high, while in the crypto market, Bitcoin (BTC) remains strong after a pullback to $126,300.
Macro Fog: US Stocks Under Pressure with Uncertainty in Monetary Policy
The political deadlock and the haze of monetary policy faced by the United States are the core reasons for the pressure on the US stock market.
· Government shutdown extended: The U.S. Senate failed to pass a temporary funding bill, and the government shutdown has entered its eighth day. The Kalshi betting platform predicts that this shutdown could last 24.1 days, becoming the second longest in history. Historical data shows that the 35-day shutdown from 2018 to 2019 caused an estimated loss of about $11 billion to the U.S. economy.
· Trade tensions escalate: While the congressional deadlock remains unresolved, the China-U.S. trade tensions intensify, with Beijing announcing export restrictions on rare earth minerals and related equipment, which also puts pressure on U.S. stock futures.
· Economic data vacuum: The closure has led to a delay in the release of key economic data (such as the Consumer Price Index), resulting in a data vacuum for the Fed and the market in assessing the direction of the economy.
· The Chinese stock market is strengthening: in contrast to the downturn in the US stock market, benefiting from the World Bank raising its GDP forecast for China in 2025 to 4.8%, as well as market optimism regarding the China-US trade agreement and Beijing's stimulus measures, the mainland Chinese stock market opened at an annual high.
Powell Moment: Interest Rate Cut Expectations Are the Lifeline for the Market
The speech by Fed Chairman Powell became the main catalyst for the market on Thursday, and his wording on monetary policy is crucial for the short-term market direction.
· FOMC Warning: The September FOMC minutes emphasized the downside risks to the labor market and the upside risks to inflation, highlighting the risk of stagflation.
· Key policy direction: Powell's comments on the economic impact of a government shutdown and the inflation outlook will be crucial. If he supports an interest rate cut in October and further policy easing, it will boost US stock futures and alleviate stagflation concerns. Conversely, if he emphasizes inflation risks, it may widen the early morning fall.
· Stock index futures trends: In Thursday morning trading, the Dow Jones E-mini fell by 57 points, the Nasdaq 100 E-mini fell by 7 points, and the S&P 500 E-mini fell by 5 points.
Technical Analysis: US Stock Futures Still Have a Short-Term Bullish Bias
Despite the early pullback, the technicals of U.S. stock futures still indicate a short-term bullish bias.
· Moving average support: The Dow Jones, Nasdaq 100, and S&P 500 E-mini all remain above the 50-day and 200-day exponential moving averages (EMAs).
· Dow Jones key levels: On the resistance side, traders should pay attention to 47,000 points, as well as the historical high of 47,323 points set on October 3, and 47,500 points. Support levels are located at 46,500 points, 46,000 points, and 45,799 points where the 50-day EMA is.
· Nasdaq 100 key levels: Resistance is at the historical high of 25,394 points on October 9 and 25,500 points. Support is at 25,000 points, 24,500 points, and the 50-day EMA of 24,158 points.
· Key levels for the S&P 500: Resistance levels to watch are the historical high of 6,812 points on October 9 and 7,000 points. Support levels are at 6,600 points and the 50-day EMA at 6,571 points.
Bitcoin (BTC/USD) Technical Outlook: Key Moment After Healthy Pullback
(Source: TradingView)
The price of Bitcoin entered a consolidation phase after soaring to $126,300, with the current trend seen as a healthy correction within the long-term bull market channel.
· Structural correction: The 4-hour chart shows a descending channel, with resistance around $123,500 and Fibonacci support between $119,500 and $117,400.
· Momentum Indicator: The Relative Strength Index (RSI) is at 47, neutral to weak, while the MACD histogram is narrowing, indicating that the bearish pressure is weakening.
key price level
· Upside breakout: A breakout above $124,000 may retest the $126,300 high and open the path to $130,000.
· Downside risk: A fall below $117,400 may test $115,000 support.
· Market Focus: Traders are closely monitoring the 0.5 and 0.618 Fibonacci pullback zones for signs of a resurgence in upward momentum in the fourth quarter.
Conclusion
In the face of significant uncertainty in American politics and monetary policy, global markets are undergoing complex games. The short-term outlook for U.S. stocks will completely depend on Fed Chairman Powell's attitude toward interest rate cuts and Congress's progress in resolving the government shutdown. In the crypto market, Bitcoin's healthy correction, coupled with the ongoing development of mainstream project ecosystems, indicates that innovation and institutionalization within the industry have not stalled. Investors should closely monitor Powell's speeches and key technical levels to prepare for potential significant market fluctuations.
Disclaimer: This article is for news information and does not constitute any investment advice. The crypto market is highly volatile, and investors should make decisions cautiously.