The Nasdaq rose 2.7% overnight, the S&P 500 gained 2.3%, and U.S. stocks were buzzing. But $BTC is still treading water around $75,000, and some traders have gone so far as to say they’re stepping away from the market for a while. Risk assets have rallied across the board, but it hasn’t followed suit. This divergence is worth a closer look.
The problem starts with its own buying demand. From November 2 to 6, U.S. spot BTC ETFs saw net outflows of $1.282 billion for the week—their biggest weekly outflow since late June—with IBIT accounting for almost all the redemptions. The stock market’s rebound is driven by a recovery in risk appetite, but spot demand for BTC is thinning. No matter how aggressively futures traders go long, they can hardly sustain a meaningful trend on their own.
A deeper constraint comes from interest rates. Nonfarm payrolls came in far above expectations, and CME data show the market now sees more than an 80% chance of a 25-basis-point rate hike in December. Stocks can still offset tighter monetary policy with earnings and the AI narrative, but BTC is much more sensitive to liquidity. Every uptick in the 2-year yield puts downward pressure on its price.
October CPI is due at 21:30 tonight. It’s the last inflation report before the December rate decision, and the market consensus is 0.3% month over month for headline CPI and 0.2% for core CPI. If core CPI comes in at 0.3% or higher, a rate hike is all but certain. The rally in U.S. stocks may not hold, and the current divergence could turn into a simultaneous selloff. A softer reading could offer some breathing room, but is unlikely to reverse rate-hike expectations.
After the data comes out, first watch which moves first—and in which direction—in the 2-year yield and BTC during the first 15-minute candle. Whether ETF flows can stop bleeding over the next few days will determine if this divergence is just a temporary bout of outflows or the start of a longer period of going their separate ways.
The problem starts with its own buying demand. From November 2 to 6, U.S. spot BTC ETFs saw net outflows of $1.282 billion for the week—their biggest weekly outflow since late June—with IBIT accounting for almost all the redemptions. The stock market’s rebound is driven by a recovery in risk appetite, but spot demand for BTC is thinning. No matter how aggressively futures traders go long, they can hardly sustain a meaningful trend on their own.
A deeper constraint comes from interest rates. Nonfarm payrolls came in far above expectations, and CME data show the market now sees more than an 80% chance of a 25-basis-point rate hike in December. Stocks can still offset tighter monetary policy with earnings and the AI narrative, but BTC is much more sensitive to liquidity. Every uptick in the 2-year yield puts downward pressure on its price.
October CPI is due at 21:30 tonight. It’s the last inflation report before the December rate decision, and the market consensus is 0.3% month over month for headline CPI and 0.2% for core CPI. If core CPI comes in at 0.3% or higher, a rate hike is all but certain. The rally in U.S. stocks may not hold, and the current divergence could turn into a simultaneous selloff. A softer reading could offer some breathing room, but is unlikely to reverse rate-hike expectations.
After the data comes out, first watch which moves first—and in which direction—in the 2-year yield and BTC during the first 15-minute candle. Whether ETF flows can stop bleeding over the next few days will determine if this divergence is just a temporary bout of outflows or the start of a longer period of going their separate ways.