The market presents a confusing picture, where two distinct worlds coexist. On one side, we see stocks buoyed by artificial intelligence-related earnings; on the other, a crypto market struggling under the dual pressure of potential interest rate hikes and outflows from ETFs. Let’s examine this contradictory landscape step by step, with an eye toward our own portfolios.

Let’s begin with the macro environment, as it dictates the overall balance. Unfortunately, U.S. inflation data for October came in higher than expected, with the monthly CPI rising by 0.4% and core CPI by 0.3%. Following this release, the market has adjusted its pricing: according to the CME FedWatch tool, the probability of an interest rate hike at the Federal Reserve’s December 8–9 meeting has surged to approximately 90%. There is even talk of a more aggressive 50-basis-point increase. Yesterday, the yield on the 10-year U.S. Treasury note hit 5.02%—its highest level since October 29—which serves as the primary source of pressure on risk assets. Although the bond market is closed today for Veterans Day, the impact of this move persists.

So, why is Wall Street rising despite these expectations for monetary tightening? The S&P 500 is up by about 1%, while the Nasdaq has gained between 1.2% and 1.8%. The primary driver behind this rally is CoreWeave, which reported revenue that beat expectations and provided an upwardly revised revenue forecast; its shares climbed by 13–19%, with Nebius also following suit. Nvidia, meanwhile, has recovered by 4–5% after a sharp two-day decline. Nevertheless, the situation remains challenging for Nvidia; It is down approximately 14% in November, having lost about $700 billion in market capitalization amid a CEO scandal. To make matters worse, Baird has downgraded the stock to "neutral."

In the commodities market, crude oil has risen by about 2.5% to the $88 level (WTI at 87.7, Brent at 93.4). Gold, meanwhile, has slipped 0.4% under the pressure of interest rates. Additionally, a call from the U.S. Treasury Secretary for "de-risking" the U.S.-China relationship has provided a further boost to futures.

Now, let’s turn to our primary focus: cryptocurrencies. While the stock market is recovering on the back of earnings reports driven by artificial intelligence, the crypto sector is under significant pressure—fueled by the near-certainty of a December interest rate hike and outflows from ETFs. In the short term, this represents the main hurdle for Bitcoin. For BTC to break above $75,700 and sustain that level, ETF outflows must cease, and the market needs to clear out following recent liquidations.

MSCI is set to announce its November index review. It is expected that Strategy will be removed from the index due to new eligibility criteria. JPMorgan estimates that this could trigger institutional sell-offs totaling approximately $2.8 billion. The changes will take effect after the market close on November 30, so it is worth keeping a close eye on these capital flows.

The calendar for the coming days is quite packed. U.S. jobless claims will be released tomorrow evening, followed by the Producer Price Index (PPI) on Friday. If the PPI data comes in "hot"—much like the recent inflation figures—the likelihood of Bitcoin testing levels below $73,000 will increase. Looking ahead to next week, our agenda includes the Solana Breakpoint event (November 15–17), Russia’s retail-focused crypto initiative (November 17), and the release of the Fed minutes (November 18). There is also a rumor circulating behind the scenes: it is being suggested that Anthropic’s initial public offering (IPO) could begin trading as early as next week, with a potential valuation reaching as high as $1.4 trillion—though it is important to note that this remains unconfirmed.

In short, we will continue to monitor ETF inflows and movements in bond yields to gauge the direction of the crypto market. As for you, what strategy are you employing in light of this week’s heavy influx of data and the expectations surrounding central bank actions?

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