Bitcoin Drops 4% to $35K Despite Soaring Tradfi Markets, But Analysts Remain Optimistic

Crypto
markets
suffered
one
of
their
worst
drubbings
in
weeks
on
Tuesday
despite

welcome
inflation
data
for
October.

Bitcoin

(BTC)
briefly
dove
to
as
low
as
$34,970
during
afternoon
hours
from
near
$36,600
this
morning
after
the
Consumer
Price
Index
(CPI)
for
October
came
in
flat
versus
expectations
for
a
slight
rise.
At
press
time,
bitcoin
was
recently
changing
hands
at
$35,300,
down
3.7%
over
the
past
24
hours.

Ether

(ETH)
tumbled
almost
6%
over
the
same
time
frame,
losing
the
$2,000
level
it
previously
regained
last
week
for
the
first
time
since
July
on
BlackRock’s
spot
ETH
exchange-traded
fund
(ETF)
filing.

Large-cap
altcoins
such
as
dogecoin

(DOGE),
Polygon’s

(MATIC)
and
Tron’s
TRON
native
tokens
endured
6%-7%
declines
over
the
day.

The
CoinDesk
Market
Index

(CMI),
a
broad
basket
of
almost
200
cryptos,
declined
4.5%,
underscoring
the
market-wide
losses.

Traditional
markets,
meanwhile,
were
all
in
on
the
idea
that
the
Federal
Reserve
is
now
finished
with
rate
hikes
and
indeed
could
be
cutting
rates
in
the
first
half
of
2024.
Late
in
the
session
Tuesday,
the
Nasdaq
was
higher
by
2.3%
(and
now
ahead
more
than
10%
in
November)
and
the
S&P
500
was
up
1.8%.

The
action
in
bond
markets
was
even
more
dramatic,
with
the
10-year
Treasury
yield
plunging
20
basis
points
to
4.44%.
Just
three
weeks
ago,
panicky
action
had
taken
the
yield
above
5%
for
the
first
time
in
more
than
16
years.
The
dollar
followed
suit,
with
the
DXY
Index
falling
by
a
whopping
1.55%.

Despite
the
rough
session
today
for
crypto,
slower
inflation
and
lower
bond
yields
may
support
prices,
investment
management
firm
Grayscale
said
in
a
Tuesday
report.
(Grayscale
and
CoinDesk
share
the
same
parent
company,
Digital
Currency
Group.)

“We
believe
the
recovery
in
crypto
valuations
can
continue
if
real
interest
rates
peak
and
we
continue
to
see
progress
toward
spot
ETF
approvals
in
the
US
market,”
the
report
noted.

“ETF
speculation
is
front
and
center
for
now,
but
the
store
of
value
narrative
still
holds
and
will
give
the
asset
a
resilient
and
increasing
floor,”
Noelle
Acheson,
author
of
the
Crypto
Is
Macro
Now
newsletter,
noted
in
an
email
to
CoinDesk.
“I
very
much
doubt
that
the
recent
sell-off
means
the
rally
is
done
for
now.”

Acheson
opined
that
the
decline
is
“more
likely
to
do
with
sellers
locking
in
profits
ahead
of
what
could
be
another
SEC
spot
ETF
delay.”

The
U.S.
Securities
and
Exchange
Commission’s
(SEC)
deadline
to
approve,
deny
or
delay
Hashdex’s
and
Franklin
Templeton’s
spot
bitcoin
ETF
filings
are
due
this
Friday
and
while
there’s
been
a
surge
of
enthusiasm
regarding
what
could
soon
be
approvals,
most
expect
more
delays
this
week.

“In
this
scenario,
momentum
might
slow
in
the
crypto
markets
as
there
would
likely
be
multiple
weeks
to
wait
for
significant
news
relating
to
the
ETFs,”
K33
Research
analysts
noted
in
a
Tuesday
market
report.