Nvidia’s $4 Trillion Surge Siphons Capital From Bitcoin as Crypto Slumps: A Deep Dive into the Market Shift
Introduction: A Tale of Two Markets
On October 28, 2025, the financial world witnessed a stark divergence. As the tech behemoth Nvidia soared, nearing an unprecedented $4 trillion market capitalization, the cryptocurrency market slumped. Bitcoin’s rally attempt stalled once again, with prices failing to hold above $116,000 and retreating below $113,000. This simultaneous surge in traditional tech equities and decline in digital assets highlights a significant capital rotation, pulling investor focus and liquidity away from crypto. The day’s events, underscored by Nvidia CEO Jensen Huang’s keynote at the GPU Technology Conference, present a clear narrative: in the short term, the gravitational pull of record-breaking stock market performance is creating headwinds for digital asset valuations.
The Afternoon Sell-Off: Bitcoin and Ether Retreat
Bitcoin’s Failed Rally and Key Support Level
For the second consecutive day, Bitcoin demonstrated a lack of bullish momentum. After an attempt to push past $116,000, sellers emerged during the U.S. afternoon trading hours, dragging the price back down. By the end of the session on October 28, Bitcoin was trading at $112,700, reflecting a nearly 2% decline over 24 hours. This price action mirrored Monday’s reversal almost identically, suggesting a pattern of resistance at higher price levels.
The significance of the $113,600 price point cannot be overstated. According to a report from Bitfinex analysts, this level represents the short-term holder cost basis and is "now pivotal for confirming a constructive shift." Historically, trading above this level has marked a transition from corrective phases to accumulation phases. Bitcoin’s inability to sustain a position above this threshold on Tuesday signals vulnerability and raises the risk of a deeper pullback.
Ether and Altcoins Follow Suit
The selling pressure was not isolated to Bitcoin. Ether fell by 4%, dropping back below the psychologically important $4,000 level. The broader crypto market largely echoed this sentiment, trading mostly in the red. Major altcoins like Solana and Litecoin each fell nearly 4%. Notably, Hedera (HBAR), which had seen initial gains related to ETF developments, gave back half of those increases. This broad-based decline occurred despite the launch of three new spot ETFs in the U.S., indicating that positive crypto-specific news was insufficient to counter overarching market forces.
The Nvidia Juggernaut: A $4 Trillion Magnet for Capital
Record-Breaking Performance in Traditional Markets
While crypto assets struggled, U.S. equity markets climbed to new heights. The S&P 500 broke 6,900 for the first time in history, and the Nasdaq composite also secured a new record high. The undisputed leader of this charge was Nvidia. The chipmaker’s stock gained 5%, reaching a new record and bringing its market capitalization tantalizingly close to the $4 trillion mark.
The catalyst for this surge was CEO Jensen Huang's address at the GPU Technology Conference. The event likely served to reinforce investor confidence in Nvidia's dominant position within the artificial intelligence and high-performance computing sectors, fueling a buying frenzy that sucked speculative capital out of other risk-on assets, including cryptocurrencies.
The Ripple Effect on Crypto-Correlated Stocks
The capital rotation away from digital assets was further evidenced by the performance of crypto-related stocks. After starting the session mostly in the green, these stocks faded sharply into negative territory by the market's close.
- Miners that have pivoted towards AI infrastructure—Bitfarms (BITF), CleanSpark (CLSK), HIVE ($0.1366), and IREN—closed the session 4%-5% lower.
- Galaxy (GLXY) fell 8% amid news of a $1.15 billion capital raise.
- MicroStrategy (MSTR), the world's largest corporate owner of Bitcoin, sank 3.7%.
This synchronous downturn across miners, service providers, and holding companies illustrates that the bearish sentiment was pervasive throughout the crypto ecosystem, not just limited to spot markets.
Analyst Outlook: Is a Deeper Bitcoin Correction Imminent?
Bitfinex’s Warning and Key Price Levels
The recent price action has prompted caution among market analysts. In their October 28 report, Bitfinex analysts warned that while Bitcoin managed to rebound from the trough of the October 10-11 crash, the correction may not be over. The key to avoiding a steeper decline lies in holding above the short-term holder cost basis of $113,600.
The analysts provided a clear risk assessment: "Meanwhile, failing to sustain above that level poses risk of a deeper retracement to near $97,500, the likely lower bound of the current consolidation range." This potential drawdown of over 13% from current levels presents a significant near-term risk for traders and investors.
Historical Context of Market Phases
The concept of a "short-term holder cost basis" is critical in Bitcoin market analysis. This metric represents the average acquisition price for investors who have held their coins for 155 days or less—typically considered more reactive traders. Historically, when Bitcoin’s price trades below this level for an extended period, it indicates a distribution or corrective phase where newer investors are selling at a loss. Conversely, sustained trading above it suggests accumulation and a healthier market foundation. The current struggle at this precise level underscores its importance as a technical and psychological battleground.
Broader Market Dynamics: Crypto Ignores Positive Catalysts
ETF Listings Fail to Spark Momentum
A telling sign of the market's weakness on October 28 was its muted reaction to positive developments. The introduction of three new spot ETF listings in the U.S., which under normal circumstances would be expected to generate bullish momentum and inflows, did little to stem the selling pressure. This suggests that macro factors and cross-asset capital flows are currently exerting a stronger influence on crypto prices than sector-specific news.
Volume Surges and Institutional Selling Patterns
The downturn was accompanied by notable volume activity elsewhere in the crypto market. For instance, SUI dropped 3.4%, breaking below its key support level of $2.60 as volume spiked 180% above its average. The sell-off was particularly sharp after 14:00 ET, with nearly 2.7 million tokens traded in a single minute during a late-day selloff. Analysts attributed this to likely institutional selling. This pattern of high-volume breakdowns was reflected in broader indices as well; the CoinDesk CD5 Index slid 1.67%, closing under $2,000 as broader crypto markets lost their earlier momentum.
Strategic Conclusion: Navigating Diverging Asset Trajectories
The events of October 28, 2025, serve as a potent reminder that cryptocurrency markets do not exist in a vacuum. They are part of a larger global financial ecosystem where capital is fluid and responsive to relative opportunities. Nvidia’s ascent toward a $4 trillion valuation represents a powerful magnet for institutional and retail capital, creating a temporary but significant headwind for digital assets.
For crypto investors and traders, the immediate focus should be on key technical levels. The $113,600 threshold for Bitcoin is more than just another number on a chart; it is a critical indicator of medium-term market structure. A failure to reclaim and hold this level increases the probability of a test of lower support zones near $97,500.
Looking ahead, market participants should monitor two primary factors:
- The sustainability of the tech stock rally: Any signs of fatigue or profit-taking in equities like Nvidia could see capital flow back into oversold crypto assets.
- Bitcoin’s adherence to historical on-chain models: The behavior of short-term holders will be crucial in determining whether this is a healthy consolidation or the beginning of a deeper corrective phase.
While the long-term thesis for blockchain technology and digital assets remains intact for many investors, short-term price discovery is being dictated by intense competition for risk capital. In this environment, patience and a disciplined focus on robust technical and on-chain metrics are paramount.
Data referenced is from October 28, 2025.