Why Bitcoin decoupled from Nasdaq and what it means for the US$112K breakout
Anndy Lian
Why Bitcoin decoupled from Nasdaq and what it means for the US$112K breakout
The global macro environment entered a pivotal inflexion point this week as political momentum gathered behind a bipartisan Senate effort to end the longest government shutdown in US history. After 42 days without full federal operations, lawmakers cleared a critical procedural hurdle late Sunday, setting the stage for a potential return to normalcy. President Donald Trump signalled his support for the compromise on Monday, catalysing a broad-based rally across risk assets.
US equity markets responded with conviction, as the Nasdaq soared by 2.27 per cent, the S&P 500 climbed 1.54 per cent, and even the more conservative Dow Jones Industrial Average advanced by 0.81 per cent. The relief extended to fixed income markets, where the yield on the 10-year Treasury note edged up by two basis points to 4.11 per cent, reflecting diminished safe-haven demand and renewed confidence in fiscal stability.
While equity and bond markets absorbed the news through classic risk-on behaviour, the cryptocurrency market exhibited a more nuanced reaction. Over the last 24 hours, the total crypto market cap rose 0.74 per cent, building on a 1.89 per cent weekly gain despite the lingering shadow of macro uncertainty. This resilience stemmed not from blind optimism, but from a confluence of three distinct catalysts that spoke directly to longstanding structural challenges within the digital asset ecosystem: regulatory clarity, DeFi tokenomics innovation, and Bitcoin’s evolving relationship with macro liquidity conditions.
The first driver emerged from Capitol Hill, where a bipartisan Senate proposal gained traction to transfer primary regulatory authority over digital assets from the Securities and Exchange Commission to the Commodity Futures Trading Commission. This legislative manoeuvre directly addresses a core grievance within the crypto industry: the SEC’s enforcement-first posture, which many developers, investors, and entrepreneurs view as hostile to innovation. By designating most digital tokens as commodities rather than securities, the bill would place them under the CFTC’s more predictable, principles-based framework.
The market interpreted this shift as a potential inflexion point for institutional adoption. Companies like Coinbase, which have long operated under the threat of SEC litigation, saw their equities rise alongside major tokens such as Ethereum, whose classification has been a source of legal ambiguity. The proposal’s success hinges on maintaining bipartisan support in a fractured Congress, but its mere introduction has already recalibrated market sentiment toward a more constructive outlook on US regulatory policy.
Simultaneously, DeFi sentiment received a powerful jolt from Uniswap, the leading decentralised exchange by volume. The Uniswap Labs team and the Uniswap Foundation introduced a comprehensive restructuring plan dubbed UNIfication, which proposes activating a long-dormant protocol fee switch and implementing a systematic token burn mechanism. Central to the plan is a one-time retroactive burn of 100 million UNI tokens, equivalent to 16 per cent of the total supply, alongside ongoing burns funded by a share of trading and Unichain fees. This directly tackles a foundational criticism of the UNI token: its lack of clear utility and inflationary pressure due to vesting schedules. By redirecting protocol revenue to token holders through buybacks and burns, the proposal aligns incentives across users, liquidity providers, and long-term stakeholders.
The market response was immediate and emphatic, with UNI surging 38 per cent and catalysing broad-based gains across the DeFi sector, including 12 per cent for AAVE and 22 per cent for CAKE. Derivatives volume for DeFi tokens spiked 133 per cent week-over-week, signalling renewed speculative and hedging interest. The ultimate test will come via on-chain governance, where token holders must approve the proposal. A rejection could trigger sharp profit-taking, but the very act of proposing such a bold realignment has reignited optimism about DeFi’s capacity for self-improvement and value accrual.
Meanwhile, Bitcoin reclaimed the US$106,000 level, drawing support from both macro relief and technical dynamics. The resolution of the government shutdown removes a near-term liquidity overhang that had likely suppressed institutional flows into spot Bitcoin ETFs. With federal operations expected to resume, market participants anticipate a resumption of ETF inflows, which have totalled US$7.8 billion in the third quarter of 2025 alone. The rally also exhibits signs of fragility. Open interest in Bitcoin futures declined by 6.3 per cent, suggesting that leveraged long positions remain cautious.
More intriguingly, the 24-hour correlation between Bitcoin and the Nasdaq turned slightly negative at negative 0.12, indicating a subtle decoupling from traditional tech equities. This hints at Bitcoin’s evolving narrative, not merely as a risky tech proxy, but as a distinct macro asset influenced by its own supply dynamics, institutional demand, and on-chain activity. Technical analysts now eye the US$112,000 resistance level, where a decisive breakout could unleash more than US$two billion in long liquidations, potentially accelerating the move higher.
Despite these bullish undercurrents, the broader sentiment remains restrained. The Fear and Greed Index sits at 31, deep in fear territory, and Bitcoin dominance declined by 0.1 per cent on the day, suggesting that capital rotation into altcoins remains tentative. This fragility underscores the market’s awareness that political and protocol-level promises must still translate into concrete outcomes.
The Senate bill transferring oversight to the CFTC faces a long legislative road, and the Uniswap governance vote could fracture consensus. Moreover, the Federal Reserve’s path on interest rates remains uncertain, with soft US economic data lifting gold to US$4,090.96 per ounce and reinforcing expectations of future rate cuts, yet Treasury yields still edged higher on shutdown resolution hopes.
In summary, today’s market gains reflect a delicate balance between hope and caution. Regulatory optimism surrounding the CFTC proposal, DeFi innovation via Uniswap’s tokenomics overhaul, and macro relief from the impending end of the government shutdown have combined to lift asset prices. The sustainability of this rally, particularly of altcoin momentum, will depend on whether these catalysts materialise into real-world changes.
Traders now watch two critical events: the outcome of UNI’s on-chain governance vote and the political trajectory of the bipartisan CFTC bill. Their success or failure will determine whether this week’s optimism evolves into a durable bull phase or fades as another false dawn in crypto’s volatile lifecycle.
Source: https://e27.co/why-bitcoin-decoupled-from-nasdaq-and-what-it-means-for-the-us112k-breakout-20251111/
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