(Kitco News) – Safe-haven assets fell under pressure on Monday while stocks climbed higher as investors reacted to President-elect Donald Trump's choice of Scott Bessent for Treasury secretary and braced for the October Personal Consumption Expenditures (PCE) report, set to be released on Wednesday.
“U.S. stocks edged higher Monday as Wall Street entered a shortened Thanksgiving week,” noted analysts at Secure Digital Markets. “With markets closed Thursday and an early close Friday, expect lower trading volume.”
“Meanwhile, President-elect Donald Trump announced plans to nominate Scott Bessent, founder of Key Square Group, as Treasury Secretary—a move welcomed by investors,” they added. “The market sees Bessent as a stabilizing figure who could temper Trump’s more aggressive protectionist policies, giving equities a potential tailwind.”
After opening higher, stocks faced downward pressure near midday but largely stayed in the green for a positive close, with the S&P, Dow, and Nasdaq finishing up 0.30%, 0.99%, and 0.27%, respectively.
Gold’s rally last week was met with selling on Monday as traders saw the uptick in price as an opportunity to take profits. At the time of writing, spot gold trades at $2,624.90, a decline of 3.35% on the session.
Data provided by TradingView shows that Bitcoin also experienced a sell-off to start the shortened holiday week, falling from support at $98,000 to hit a low of $94,444, with bears looking poised to challenge lower support levels.
BTC/USD Chart by TradingView
“Bitcoin is steering the crypto market, signaling that institutional interest—largely fueled by ETF buying—is in the driver’s seat,” said analysts at Secure Digital Markets. “Crypto ETFs continue to stack up, powering BTC’s price action. BTC raked in $490.3 million in inflows on Friday, while ETH had a solid rebound with $91.3 million, breaking its six-day losing streak.”
"Looking under the hood, BTC’s order book tells a cautious tale,” they warned. “Bullish flow is thinning out, with sellers gradually taking control as market depth erodes. The rally lacks the fresh buying power we saw earlier, making it clear that new players need to step in to sustain momentum. Over the weekend, volatility wiped out over $500 million in liquidations across both long and short positions, underscoring the heightened risk environment.”
Secure Digital Markets analysts suggested that Bitcoin’s “max pain point stands at $78,000, well below the current spot price—suggesting an imbalance that could play out in the coming weeks. Most of the put open interest reflects hedging, not outright bearish bets, indicating traders are managing risk rather than positioning for a steep downturn.”
At the time of writing, Bitcoin trades at $94,833, a decline of 1.98% on the 24-hour chart.
Near-term pressure, mid- to long-term bullish
While Bitcoin faces some headwinds in the near term, analysts at Bitfinex say a correction to lower supports will be healthy for the overall market structure as things have gotten overheated over the past several weeks.
“With BTC now up 47 percent since the pre-election low of $66,880 and an astonishing 130 percent year-to-date, it is charting new territory,” they wrote. “BTC outperformance compared to traditional assets is undeniable: Bitcoin has now eclipsed Saudi Aramco in market capitalization, securing its place as the seventh-largest asset globally, with a valuation at its high that exceeds $1.9 trillion and has outperformed gold and silver, in relative terms this quarter.”
“While Bitcoin's rally has been remarkable, it has not come without profit-taking from long-term holders LTHs,” they noted. “Over 461,000 BTC has been spent to date, following the break of the 73,666 ATH last month, as LTHs capitalize on gains far above their realized price of $24,912.”
Despite the elevated distribution pressure, “it remains contained compared to historical peaks in March 2021 and March 2024,” the analysts said. “These movements suggest a healthy, yet temporary, stalling of momentum, with the broader market likely to absorb selling pressure and continue upward in the medium term.”
Altcoins are also showing signs of strength, with the Total3 index, which excludes Bitcoin and Ethereum (ETH), achieving new cycle highs “driven by surging investor sentiment,” they added. “Total3 experienced a 23.2 percent trough-to-peak increase last week —the largest move since April 2021. Large-cap altcoins, such as Solana (SOL), reached new all-time highs, marking a pivotal moment as they surpassed key resistance levels, including the April 2022 high.”
“Altcoin market capitalization is now nearing its May 2021 peak of $984 billion, suggesting a shift in speculative capital from Bitcoin to altcoins,” they noted. “Historically, such rotations have signaled the onset of ‘alt season,’ a period characterized by outsized gains in altcoins relative to Bitcoin.”
With Bitcoin up nearly 50% from pre-election lows and 130% year-to-date, Bitfinex analysts reiterated, "It is not surprising that we have seen most recently some profit taking, and a temporary stalling of momentum.”
That said, they noted that “As we approach the $100,000 mark and maintain a price comfortably above $90,000, it is important to monitor daily ETF flows. A slowing of inflows would suggest a lack of interest for spot Bitcoin at currently high prices and could be the warning sign for a larger correction.”
“Our view is that any sell-off is a healthy correction,” the analysts said. “Indeed, we anticipate that there could even be a slightly larger correction this week, particularly as important macro events such as the US Consumer Price Index data release and Federal Open Market Committee minutes are published.”
“It is also important to note that when price has a strong impulse in either direction, a small corrective move is expected as supply/demand and open interest (OI) balances out at new price levels,” they added. “While there have been warnings of a major crash/correction since we saw an ATH in OI in October, it is important to note that in a momentum-driven market, it is normal for price and open interest to increase rapidly in a short duration of time before a small corrective/ranging period before continuation.”
“Given the marriage of potentially slowing ETF flows, important macro news events, and long-term holder profit taking, we might see a small correction, but we expect all downside volatility to be temporary until flows change on a sustained basis,” they concluded.
Altcoin’s rally as Bitcoin corrects
Bitcoin’s entry into correction territory boosted altcoins, with a majority of tokens in the top 200 recording gains on Monday as traders rotated from BTC to low-cap projects.
Daily cryptocurrency market performance. Source: Coin360
Aelf (ELF) was the top gainer, surging 68.9%, followed by gains of 26.7% and 22.4% for Ethereum Name Service (ENS) and Lido DAO (LIDO), respectively. Recently high flying meme coins continued to lead the losers, with Goatseus Maximus (GOAT) falling by 9.7%, Peanut the Squirrel (PNUT) falling by 6.9%, and Popcat (POPCAT) declining by 6.6%.
The overall cryptocurrency market cap now stands at $3.27 trillion, and Bitcoin’s dominance rate is 57.3%.
