Dow futures pounded more than 200 points higher and US stock market traders collectively breathed a sigh of relief ahead of Tuesday’s open after congressional negotiators announced that they had reached a tentative deal to avoid a second costly partial federal government shutdown. The bitcoin price, on the other hand, flipped red as the crypto market failed to maintain last week’s bullish momentum.
Dow Pounds Higher as Congress Moves to Avoid Second US Government Shutdown
As of 8:41 am ET, Dow Jones Industrial Average futures had surged by 200 points or 0.8 percent, implying an opening bell leap of about 185 points. S&P 500 futures rose 0.7 percent, and Nasdaq futures climbed 0.8 percent to forecast what looks like a rosy day for the US stock market — assuming those gains hold throughout the trading session.
On Monday, a hectic day on Wall Street resulted in a mixed close for the stock market’s major indices. The Dow opened to triple-digit gains, only to end the day 53.22 points in the red. The Nasdaq and S&P 500 also pared gains, though they managed to cling to advances of 0.13 percent and 0.07 percent, respectively.
Congress Strikes ‘Tentative’ Wall Agreement
The mood rapidly shifted on Monday night, though, after the top four US congressional appropriators — a bipartisan group that includes Sen. Richard Shelby (R-AL) and Rep. Nita Lowey (D-NY) — emerged from a meeting boasting that they had reached a tentative agreement on a spending bill that would fund the federal government while also providing President Donald Trump with some border wall funding — albeit less than he wanted.
What if Trump Doesn’t Sign it?
But while Democrats and Republicans in Congress have now found common ground, the bill – which has not yet been published – still needs Trump’s signature. The president has not revealed definitively whether he will sign the agreement, merely stating at a Monday night rally that “we’re building the wall anyway.”
If Trump refuses to sign the bill, the federal government will likely enter another shutdown, just weeks after a temporary truce put an end to the longest government shutdown in US history.
Moody’s has warned that the next shutdown would be more costly than the first, and – judging from this morning’s pre-bell stock market rally – it’s even more likely that failure to pass a new spending bill will rock the Dow and its sisters.
Bitcoin Price Struggles to Maintain Interim Support
On the cryptocurrency front, last Friday’s rally excited the bulls but has begun to sputter out. Unable to make a sustained push past $3,700, the bitcoin price has now crept below $3,600, and Mati Greenspan – a senior market analyst at eToro – says that it risks falling below its interim support level.
“At this point, bitcoin is struggling to hold the interim support of $3,550,” Greenspan wrote in daily market commentary. “Should the level be breached to the downside, this could very easily turn into another Bart Simpson formation, which has become famous in the crypto markets.”
That notorious Bart Simpson formation would not only take bitcoin down to where it was before the pump but could contribute to a further souring of sentiment. If that happens, there could be a greater likelihood that critical support at $3,100 will falter, which analysts including Fundstrat and BitOoda say would likely be followed by a crash to the low $2,000s.
In the meantime, the bitcoin price is trading at $3,581 on Bitstamp, roughly $30 above its interim support level. The flagship cryptocurrency’s price has declined 0.52 percent from its previous-day level.
Virtually every other large-cap cryptocurrency endured minor-to-moderate declines as well, with tron and binance coin leading the retreat with pullbacks of around 4 percent. Only one top-10 crypto token advanced against the US dollar, with that asset – EOS – climbing 1.89 percent for the day. Altogether, the cryptocurrency market cap stands at $120.9 billion, which represents a 24-hour loss of $600 million.
Featured Image from AFP PHOTO / Bryan R. Smith. Price Charts from TradingView.
Last modified: March 4, 2021 2:53 PM