Bitcoin (BTC) concluded its first trading day of the week in the United States on a positive note, but it lost a significant portion of its gains as the yields on the 10-year US Treasury bonds surged to their highest level in over 16 years. Over the past 24 hours, the world’s largest cryptocurrency has been trading in the red, experiencing a 1.57% decrease. Meanwhile, the much-hyped Ethereum Futures Exchange-Traded Funds (ETFs) failed to attract investor interest, with reported low trading volumes on their first day.
Bitcoin finished the US trading day below $28,000, marking about a 3% increase. In the same period, Ether was trading at approximately $1,670. The CoinDesk Market Index (CMI) rose over 1.6% in the past 24 hours.
In the stock market, equities fluctuated on Monday after US lawmakers over the weekend prevented a government shutdown with a stopgap funding bill. Interest rates continued to rise, with the yield on the 10-year US Treasury bond increasing by an additional 11 basis points to 4.69%. The yield surged following unexpectedly strong manufacturing data, with the ISM index at 49 compared to the expected 47.7, suggesting the possibility of more interest rate hikes.
All of this is happening as the cryptocurrency market enters October, historically one of its strongest months.
The cryptocurrency market, particularly Bitcoin, has witnessed a significant recent recovery influenced by factors such as the SEC’s approval of the Ethereum Futures ETF and other government decisions, as noted by QCP Capital in a recent note. They emphasize that Bitcoin has surged by 15% in the past two weeks. However, QCP is concerned about the sustainability of the price increase, with changing demand dynamics and historical data indicating potential market retracement.
They wrote: “We even go so far as to say that the ETF fund, because it has the potential to direct demand from the spot market to the derivatives market, is arguably disadvantageous to the spot price.” QCP stated that they are using this recovery phase to purchase downside risk hedges, expecting resistance levels to hold in the range of $29,000 to $30,000.
For the recently launched Ethereum Futures ETFs, trading volumes remained low throughout the first day.
Michael Safai, a fund manager at Dexterity Capital, said: “Even if these ETFs launch and don’t massively drive price changes, that’s okay. That’s what the assets have to do.”