Bitcoin drops below 65K, market turns conservative, Asian stocks fall almost across the board except for the Chinese stock market.

After a strong rally in global risk assets last week, the market turned cautious today, with most Asian stocks falling except for the Chinese stock market. Bitcoin dropped below 65K, while Ethereum hovered around 2,600. Investors are now focusing on the upcoming speech by Federal Reserve Chairman Powell and the non-farm payroll data to be released on Friday, both of which could potentially impact market trends.

China's liquidity injection led Bitcoin to surge above 66K, marking a fruitful week for risk assets.

Asian Stocks Apart from the Chinese Market Experience Broad Declines

China saw a surge in the Nasdaq Golden Dragon Index HXC by 23.94% last week, stimulated by a comprehensive monetary and fiscal stimulus package. The Purchasing Managers' Index (PMI) for China in September recorded 49.8, indicating that although manufacturing activities have been shrinking for five consecutive months, the extent is not as severe as expected. The Chinese stock market remains strong today, with the Hang Seng Index HSI up by 3.33% and the Shanghai Composite Index soaring over 8%.

The Chinese stock market surged as the contraction in manufacturing was less severe than anticipated, drawing attention from crypto enthusiasts towards A-shares.

The Nikkei Index NIKKEI plummeted by 4.8% following the victory of Fumio Kishida. Efforts by Fumio Kishida to support the Bank of Japan's tightening monetary policy typically lead to a higher interest rate, which may strengthen the Japanese yen, putting pressure on Japan's stock market, particularly export-heavy sectors. A stronger yen could decrease its export competitiveness.

The USD/JPY exchange rate dropped from 146.5 to 142.15 last Friday, with the yen appreciating by nearly 3%. This has raised concerns in the market about a potential arbitrage liquidation reminiscent of the massive sell-off in early August.

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The Taiwan Weighted Index fell by 2.62%, with the tech giant TSMC once again falling below the 1000 NTD threshold. Last week, there were reports that the Beijing government discouraged Chinese companies from purchasing Nvidia AI chips, leading to a 2.13% decline in Nvidia NVDA, dragging down TSMC and the overall market.

Bitcoin Falls Below 65K, Ether Hovers Around 2.6K

In the past 24 hours, the price of Bitcoin dropped by 1.5%, reaching $64,528 at the time of writing. Following the release of lower-than-expected Personal Consumption Expenditure (PCE) data last week, BTC briefly surged to $66,498, marking the highest point since August. However, significant obstacles remain ahead, and whether it can challenge the historical high of $73,798 set in March of this year will require more positive catalysts.

Ether also saw a slight decline, with a 0.4% decrease over 24 hours and a price of $2,626 at the time of writing.

Market to Focus on Powell's Speech and Non-Farm Payroll Data

Investors are closely watching two key macroeconomic events this week, Federal Reserve Chair Powell's speech at the National Association for Business Economics tonight and the U.S. non-farm payroll report on Friday.