Bitcoin's 10% Monthly Loss Raises Concerns About Nasdaq's Rally

The cryptocurrency market saw a slight rebound early Tuesday, with Bitcoin (BTC) trading above $61,000 after hitting a low of $58,580 on Monday. However, BTC's 10% monthly loss stands in stark contrast to the 5% gain in the Nasdaq, suggesting a potential tightening of liquidity conditions in financial markets. This could be a bearish signal for the Nasdaq, according to Mott Capital Management founder Michael Kramer, who believes that Bitcoin serves as a liquidity gauge. He also noted that Nvidia's performance has mirrored Bitcoin's and could be impacted by the tightening liquidity. Meanwhile, Polymarket's prediction market shows Donald Trump as the clear favorite to win the 2024 U.S. Presidential election, with a 57% chance of victory over Joe Biden. Trump's favorable stance on crypto could lead to increased investment in BTC and the wider market in anticipation of his potential presidency. Spot ether ETFs are nearing availability in the U.S., but broker Bernstein believes they could see less demand than their BTC counterparts due to the lack of an ETH staking feature in the ETF. However, analysts expect the basis trade to contribute to healthy liquidity in the ETF market. The notional open interest in Bitcoin futures has declined by 14% since June 7, suggesting a possible unwinding of carry/basis trades due to negative funding rates.