U.S. Markets Surge on U.S.-China Trade Optimism as Digital Assets Experience Profit-Taking

Investor confidence soared on renewed hopes for a breakthrough in U.S.-China trade negotiations, driving U.S. stock markets higher across the board. Meanwhile, the digital asset market, which had shown signs of recovery, encountered profit-taking, resulting in minor pullbacks.

Cryptocurrency Market Review: Bitcoin and Ethereum React

As of 8:30 a.m. local time on October 28, Bitcoin (BTC) was trading at 168.84 million KRW ($114,101) on South Korea’s Upbit exchange, noting a modest 0.39% decline from the previous day. On Binance, Bitcoin fell slightly more, down by 0.42%. Ethereum (ETH) saw a sharper decrease, dropping 1.36% to $4,120, with XRP also dipping by 0.45% to $2.64 during the same timeframe.

Market liquidation data acquired from Coinglass revealed notable trading activity in the Bitcoin space, with $60.6 million (86.8 billion KRW) liquidated within 24 hours—84.6% of these stemming from short positions. Across the broader cryptocurrency market, total liquidations amounted to $323 million (463 billion KRW), indicating a moderate pullback in trading momentum, despite broader optimism in digital asset outlooks.

U.S.-China Trade Negotiations Fuel Optimism Across Markets

The week began with heightened anticipation as high-level trade discussions between U.S. and Chinese leaders signaled progress toward resolving longstanding economic disputes. A framework for definitive agreements was reportedly outlined during diplomatic meetings held in Kuala Lumpur, Malaysia, on October 25-26, spearheaded by U.S. Treasury Secretary Scott Besant and Chinese Vice Premier He Lifeng.

President Donald Trump, traveling to Tokyo after the Kuala Lumpur meetings, voiced optimism about the negotiations, stating, "I believe we are on track to finalize the agreement." These remarks bolstered Wall Street sentiment, propelling major market indices to new gains.

The Dow Jones Industrial Average climbed 0.71% to close at 47,544.59, while the S&P 500 surged by 1.23% to reach a record 6,875.16, marking the first time the index surpassed the 6,800 level. The Nasdaq, heavily weighted toward technology stocks, soared 1.86%, settling at 23,637.46.

Technology Stocks Lead the Charge

Driving these equity market gains were the “Magnificent Seven,” a coalition of large-cap U.S. technology companies, which collectively advanced by an average of 2.6%. Microsoft, Alphabet (Google’s parent company), Meta (Facebook), Amazon, and Apple are set to release their earnings this week, drawing investor attention as key barometers for broader market performance.

Louis Navellier, CEO of Navellier & Associates, commented, "This bullish momentum reflects heightened market expectations for corporate earnings improvement. Investor sentiment is at a significantly elevated level."

Digital Assets: Pullbacks Amid Upward Trends

In the cryptocurrency sphere, Bitcoin remains resilient in its broader recovery despite minor declines. Technical analysis continues to reflect an upward trajectory; the 20-day moving average for Bitcoin has shifted positively, a signal of momentum in the short term. Likewise, the Relative Strength Index (RSI) indicates strong buying pressure overall, supporting Bitcoin’s bullish cycle.

However, analysts caution that maintaining crucial support levels will be integral to avoiding further losses. A notable breach below $107,000 could amplify selling pressure, disrupting the asset’s structural recovery. Alex Sohn, Head of Research at Galaxy Digital, noted, "While Bitcoin's bullish cycle remains intact, a drop below $100,000 would raise concerns over the asset’s structural recovery."

Fear & Greed Index in Neutral Zone: Stability in Sentiment

Alternative’s Fear & Greed Index, a widely followed metric for gauging digital asset market sentiment, shifted from 41 (fear) to 51 (neutral) overnight. This rise signals an easing of fear-driven selling pressures while reflecting the stability of investor sentiment in the cryptocurrency market. The index’s scale spans from 0 (extreme fear) to 100 (extreme greed), with neutral territory often pointing to balanced market conditions.

Outlook: Trade Negotiations and Earnings Season Shape Market Trajectory

As digital assets take a breather from their recent rally, all eyes are on the broader financial landscape, where trade diplomacy between the U.S. and China, corporate earnings reports, and evolving macroeconomic factors continue to drive activity in stock and cryptocurrency markets. These developments are anticipated to shape the next phase of market movement in the weeks ahead.