Bitcoin An attempt was made to rebound late into the weekend, but even these small gains were mostly reversed in early U.S. action on Monday, with prices quietly settling around $90,000 for the remainder of the day.
At the close of U.S. markets, Bitcoin was trading around $90,500, down about 1% in the past 24 hours.
The altcoin giant also struggled to hold on to gains. Ethereum’s Ethereum Slightly lower, but slightly stronger and climbing to the highest relative price against BTC in over a month. Other companies that performed well include privacy-focused Zcash and institution-focused blockchain Canton Network (CC), both recorded double-digit gains. The broader cryptocurrency market, as measured by the CoinDesk 20 index, fell 0.8%.
Despite the lull in crypto action, long-term government bond yields surged amid concerns that problems with Japanese bonds could spread to other markets. The U.S. 10-year Treasury yield surged to 4.19%, the highest level in about three months, while bonds in the U.K. and other European countries also sold off. At the same time, Japan’s 10-year government bond yield continues to climb to 2%, a level not seen in nearly two decades.
U.S. stocks also fell on the day, with the S&P 500 down 0.5% and the Nasdaq down 0.3%, weighing on broader risk appetite.
The key event this week will be the last Fed meeting of the year. While the 25 basis point rate cut was fully expected, news of further moves or additional liquidity measures could spark volatility on Wednesday.
LMAX market strategist Joel Kruger said in a note: “Any easing in financial conditions or further weakness in the U.S. dollar could bring tailwinds, while any hawkish surprises in the pace or extent of Fed policy easing could amplify downward pressure on cryptocurrency markets.”
BTC faces structural resistance
Despite Bitcoin’s recent rebound from November lows, Bitfinex analysts warned that the largest cryptocurrency is dealing with structural weakness and subdued spot demand.
In a report on Monday, they noted that while the S&P 500 is trading near all-time highs, BTC is stuck in range-bound trading, highlighting the deepening divergence between cryptocurrencies and traditional risk assets, signaling relative weakness.
Bitfinex outlines several key signals that reinforce this view:
- U.S.-listed spot Bitcoin ETFs have continued to see outflows, with traders selling rather than adding to their holdings, as evidenced by sharply negative cumulative volume delta (CVD) on major exchanges.
- Currently, more than 7 million Bitcoins are sitting on unrealized losses, echoing similar bearish sentiment during the 2022 consolidation period.
- While capital inflows remained slightly positive at $8.69 billion per month (measured as a change in net realized caps), they were well below peak levels and provided only a modest buffer against downside risks.
Bitfinex analysts believe that all these factors add up to a very fragile situation at the end of the year.
“With spot demand weakening, the market now faces a backdrop of significantly thinner buyers,” the report said. “This reduces direct support for prices and increases sensitivity to external shocks, macro-driven volatility and further tightening of financial conditions.”
