The S&P 500 rose about 0.7% and the Nasdaq about 0.9% by early afternoon, and gold gained 0.7%. Bitcoin touched $79,332 and traded near $80,070, below the average cost of U.S. spot ETF holders.
Monday offered bitcoin the kind of session that usually lifts it. U.S. stocks rallied, technology led, and volatility fell. Bitcoin did not follow.
By early afternoon in New York, the S&P 500 was up 0.69% and the Nasdaq Composite 0.92%, putting both on course for their best day in a month. The Cboe Volatility Index fell about 5% to 18.46. Gold rose 0.72% to $4,036.60 an ounce.
Bitcoin traded at about $80,069 at 1:48 p.m. Eastern, after touching a low of $79,332 during the session. It fell to about $79,150 on Saturday, its lowest since mid-September and below its Oct. 15 low, and has been testing the same line since.
A risk asset that isn't trading like one
Bitcoin is often traded as a risk asset alongside technology stocks. Monday did not fit that description. A firm equity tape, led by large technology names, coincided with bitcoin holding flat at its lows.
The difference points to something specific to crypto demand rather than a broad retreat from risk. The most visible source of that demand, U.S. spot bitcoin ETFs, has been uneven. Last Thursday, the funds lost $635.6 million, the largest single-day outflow since June.
The level matters for those holders. Coinbase's institutional research team estimates the average purchase price of spot bitcoin ETF shares at about $81,300. At $80,000, the average holder is under water, which can turn would-be buyers into sellers waiting to break even.
The rate backdrop
The other pressure is the Federal Reserve, which announces its decision on Wednesday. A hold is expected, but the odds of an increase rose during Monday's session in prediction markets, and the two-year Treasury yield edged up about 2 basis points to 4.707%. Rising rates increase the return on cash and tend to weigh most on assets that pay no yield.
Gold, which also pays no yield, rose on the day. Investors may be treating it as a hedge against the Gulf conflict and inflation, a role bitcoin is not playing this week.
Two readings
One reading is that bitcoin is consolidating. It has tested $80,000 repeatedly since Saturday without breaking far below it, and a hold by the Fed on Wednesday would remove one source of pressure.
The other is that the failure to rally with stocks is the warning. ETF holders are below their cost, rate expectations are moving the wrong way, and the haven trade is going to gold. Saturday's low was bitcoin's weakest level since mid-September, so a break below it would take the price into territory with little recent trading behind it.
What to watch
Monday's ETF flow figures, the Fed's statement and press conference on Wednesday, results from Coinbase and Strategy on Thursday, Friday's options expiry, and whether bitcoin holds above Saturday's low.