Analysts expect Bitcoin to retest $80,000 support again as stock markets attempt to recover last week’s losses.
Bitcoin (BTC) starts the third week of October at $82,000 as crypto and stock markets begin a tentative rebound.
A lighter week of US macro data prints will shift the market’s attention to corporate earnings as stocks rebound from last week’s sell-off. Some 15% of S&P 500 companies are due to report third-quarter earnings figures this week, including SpaceX on Tuesday and Tesla and Meta on Wednesday.
Tech-stock performance remains in focus after a major drawdown last week that began with South Korean markets. The KOSPI Composite Index lost 2.8% on Oct. 12 before dropping to the week’s low of 5,455 on Thursday, bringing the week-to-date losses temporarily to 17%.
KOSPI Composite Index one-day chart. Source: Cointelegraph/TradingView
Contagion spread to neighboring Asian markets before US equities began to weaken later in the week. The S&P 500 index finished Friday down 2% for the week.
As in early August, tech stocks saw considerable sell-side pressure amid concerns over AI expenditure plans and the associated debt obligations. In Korea, the threat of competition in semiconductor manufacturing from China exacerbated the downturn.
Warnings of a “Black Monday” event on global stock markets spread through social media over the weekend. The panic, which coincided with the 39th anniversary of the 1987 Black Monday crash, appeared misplaced, with KOSPI gaining 1.8% on Monday and S&P 500 futures 0.7% higher at the time of writing.
S&P 500 futures one-day chart. Source: Cointelegraph/TradingView
Commenting on the disconnect between public sentiment and market performance, market commentator The Kobeissi Letter suggested that stocks should outperform based on investor demand. Persistent high US inflation and a global energy crisis have positioned equities for a surge on any potential signs of conditions improving.
“All while the AI Revolution continues to accelerate and many large-cap technology stocks become cheaper on a forward earnings basis, even as their stock prices rise. And in the background, the demand for asset ownership is historically robust,” it summarized in analysis last week.
Kobeissi noted that while tech giants led S&P 500 strength, 80% of index stocks are trading at least 10% below all-time highs.
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