Bitcoin News Today: Crypto Market Slumps, Institutions Push Staking Deals as Fed Holds Key to Recovery

The cryptocurrency market has entered a period of consolidation, with Bitcoin (BTC) and major altcoins experiencing a sharp decline amid waning institutional demand and uncertainty over U.S. monetary policy. Long-term holders of Bitcoin appear to be reducing selling pressure, a shift that aligns with broader market cooling as investors adopt a wait-and-see approach ahead of potential Federal Reserve policy adjustments.

According to on-chain analytics firm CryptoQuant, fading institutional interest and a lack of clarity around the Fed's next steps are key drivers of the recent downturn. The Coinbase Premium Gap-a metric reflecting U.S. buying activity-turned negative, signaling weak demand from institutional players. This comes as Bitcoin, which had previously led a broader market rally, dropped nearly 3.2% in a 24-hour period, dragging down Ethereum (ETH) and XRP by similar margins. The total crypto market capitalization fell by over $200 billion in a single day, with leveraged long positions totaling $1.2 billion liquidated, according to CoinPedia.

The decline has sparked speculation about a potential shift in investor behavior. While short-term traders have retreated, long-term holders of Bitcoin-who control a significant portion of the supply-have shown reduced selling activity. This trend may reflect a growing confidence in Bitcoin's long-term value proposition, particularly as macroeconomic volatility persists. "The best opportunities often arise when most traders have stepped back from the market," noted a market analyst, highlighting the potential for a rebound once the current uncertainty subsides.

Institutional crypto adoption, meanwhile, remains a bright spot. Galaxy Digital and Coinbase Prime announced a partnership on Oct. 29 to streamline institutional access to staking services, combining Coinbase's custody solutions with Galaxy's globally distributed validator network, according to Yahoo Finance. The integration allows asset managers, hedge funds, and ETFs to diversify staking activities while gaining liquidity on staked assets. With $6.6 billion in assets under stake as of Sept. 30, Galaxy's collaboration with Coinbase Prime marks its fourth custodial integration this year.

Further institutional momentum came as Citi partnered with Coinbase to expand digital asset payment services for institutional clients, according to FinTech Futures. The collaboration aims to leverage Coinbase's infrastructure and Citi's global payments network to facilitate fiat-to-digital asset conversions and stablecoin transactions. This follows Citi's recent integration of blockchain-powered token services with its USD Clearing solution, underscoring banks' growing interest in crypto infrastructure.

Despite these developments, the market remains sensitive to macroeconomic signals. The Federal Reserve's pause on quantitative tightening has not yet translated into improved liquidity conditions, with traders closely watching for policy clarity ahead of the central bank's upcoming decisions. CryptoQuant analysts suggest that liquidity could stabilize by early 2026 if the Fed signals an end to tightening cycles, potentially reigniting risk appetite.

The U.S.-China trade truce, which saw President Donald Trump halve fentanyl-related tariffs on Chinese imports, has also introduced a layer of geopolitical uncertainty. While the agreement aims to ease tensions, analysts caution that its impact on global supply chains and investor sentiment remains mixed. Ian Bremmer, founder of Eurasia Group, characterized the truce as a "one-year tactical pause" rather than a breakthrough, noting that structural issues between the two economic giants persist.

For Bitcoin, the interplay of macroeconomic factors and institutional dynamics will likely dictate near-term price action. While the current downturn has tested market resilience, the reduction in selling pressure from long-term holders-coupled with institutional infrastructure advancements-suggests a potential floor for the asset. Traders are advised to monitor post-options expiry price movements and developments in the U.S. Treasury yield curve, which could provide further directional cues.