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Bitcoin Dips Below $28K Amidst Yield Spikes; Lukewarm Response to Ether Futures ETFs

Oct 5, 2023 at 06:58 am

Bitcoin experienced a dip below the $28,000 mark, while Ether also saw a decline below $1670.

Throughout the first trading day of the week in the U.S., Bitcoin initially showed some positive movement but later retracted some of its gains, possibly influenced by a sharp rise in the U.S. 10-year yield, which reached its highest point in over 16 years. Over the last 24 hours, the world's leading digital currency slipped into negative territory, experiencing a 1.57% decrease. Meanwhile, the much-anticipated launch of ether futures exchange-traded funds (ETFs) failed to generate significant interest among investors, with reported low trading volumes on their debut.

Bitcoin is poised to conclude the U.S. trading day just below $28,000, marking an approximate 3% increase according to data from Bitsday Indices. In the same period, Ether is trading at roughly $1670, showing a modest decline for the session. The Bitsday Market Index (BMI) has seen a 1.6% increase in the past 24 hours.

In the equities market, Monday witnessed a mixed performance in stocks following the weekend's successful prevention of a government shutdown through a stop-gap bill. Concurrently, interest rates continued their upward trajectory, with the U.S. 10-year Treasury yield surging another 11 basis points to reach 4.69%. This surge was driven by unexpectedly robust manufacturing data, underscoring the resilience of the U.S. economy. ISM figures came in at 49, surpassing the forecasted 47.7, indicating the possibility of further rate hikes.

Against this backdrop, the cryptocurrency industry enters October, historically known for its robust performance.

The recent surge in the crypto market, particularly in Bitcoin, can be attributed to various factors, including the SEC's approval of Ether futures ETFs and other significant government decisions. According to QCP Capital, Bitcoin has witnessed a 15% surge over the past two weeks. However, QCP expresses reservations regarding the sustainability of this rally, citing shifts in demand and historical data as potential indicators of an impending market downturn.

QCP further argues that a futures-only ETF could potentially have a detrimental effect on the spot price, as it might divert demand away from the spot market towards a synthetic market. They anticipate resistance around the $29,000-$30,000 range.

Regarding the recently introduced Ether futures ETFs, trading volumes remained subdued throughout the day.

Dexterity Capital's Managing Partner, Michael Safai, noted that even if these ETFs do not lead to massive price fluctuations, it is perfectly normal. He emphasized that assets are not expected to be wildly volatile. Safai also pointed out that ETF issuers might not possess the same level of market insight as traders and suggested that their optimism might be somewhat misplaced, as anyone interested in Bitcoin or Ether likely already holds them.

Read more: Bitcoin Struggles to Maintain $26K Amidst Escalating Interest Rates

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