Although the month of October is considered one of almost certain gains in the crypto world, not all analysts are convinced. Some experts believe that risk assets such as cryptocurrencies and stocks could go into a rough patch.
Within the stock market, September and October are months of weakness for equities, say CNBC experts. However, in September the main indices managed to reverse that trend by establishing historical highs. Is it possible for stocks to reverse two months of historic losses in a row? asks BTIG’s Jonathan Krinsky. He then answers that it is unlikely.
They emphasize that one of the factors that could lead to a decline or even a correction in stocks is the US employment report. So far, everything seems to indicate that the Federal Reserve is achieving the unlikely, a soft landing. The accelerated fall in inflation without causing significant economic damage is presented as a very probable reality.
However, if the number of new employees in September does not meet expectations, the markets could again decline. At this point, October would become a bearish month pending the new FOMC meeting in November. The correlation of stocks and cryptocurrencies could cause a crash in both sectors, as happened in August.
The relationship between stocks and cryptocurrencies
In a few days the report of new non-farm payrolls in the US will be known. FactSet expects that about 150,000 new employees will be added from 142,000 in August. Meanwhile, unemployment is expected to remain at 4.2%. According to Adam Turnquist of LPL Financial, any weaker number may raise doubts among investors.
On the other hand, the aforementioned CNBC work states that another of the elements that threatens a weak October is the proximity of the elections. At the beginning of November, the presidential elections will be held in the United States and their results could have a strong impact on the markets.
Likewise, experts believe that stocks’ gains in September were probably too strong. In that sense, investors would now be exhausted and this would lead to profit-taking selling. In fact, a significant number of assets established historical highs during this month that is about to expire.
The latter also implies that October could become a month of great opportunities to buy stocks at low prices. In any case, the relationship between assets, such as stocks and cryptocurrencies, could be tied to the events of October. It is crucially important for investors to keep an eye on the new payrolls report.
So far, the main cryptocurrencies remain in the green. However, the momentum seems to slow slightly. For its part, the price of Bitcoin remains above $65,600 per token and its 24-hour performance is almost flat.
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