Are U.S. stocks in trouble? Why was this sell-off so severe?
Last night, the U.S. market took on the feel of a crash, with the seven biggest tech giants losing $1.04 trillion in market value in a single day. The irony is that just the day before, the Dow had surged 1,569 points to celebrate the election results being finalized. Then, in the blink of an eye, the market mood changed.
We thought uncertainty had lifted, but new concerns emerged: Can AI keep burning through cash at this pace? Will these investments actually pay off?
There are three main reasons behind this sell-off:
First, data center approvals may face tighter restrictions. Democrats made gains in several key areas, prompting concerns that changes to local approval policies could slow data center construction and, in turn, affect the AI computing supply chain.
Second, the returns on AI capital spending are being questioned. Alphabet's earnings report once again fueled concerns about the massive sums being poured into AI: How much of that investment will actually pay off in the future?
Third, talk of an AI bubble is heating up again. The key issue for Burry is chip depreciation. If chips lose value faster than companies expect, future profits may need to be reassessed.
So why did BTC plunge too?
The reason is simple: Risk assets across the U.S. stock market fell together, leveraged investors started pulling out, and BTC naturally couldn't escape the fallout. On top of that, the previous rally had built up plenty of unrealized gains, and concentrated selling pressure amplified the downturn. Ethereum fell even further, and liquidations across the crypto market also increased.
My take is that what’s really worth watching this time isn’t just the political factors, but the fact that the market’s valuation logic for AI—the dominant theme— is being challenged. These concerns may not be fully absorbed in the short term.
Back to BTC: around $81,000 is a key resistance zone, and the $78,000–$79,500 range is worth watching closely. If support gives way, the next level to watch may be $75,700, with around $72,000 as a further level of interest.
If BTC stabilizes around $75,000, you can watch for opportunities to build a position gradually. If it breaks below that level decisively, manage your risk promptly and don’t blindly buy the dip.
The more volatile the market gets, the more important it is to stay calm. Opportunities can wait, but protecting your capital comes first!
Last night, the U.S. market took on the feel of a crash, with the seven biggest tech giants losing $1.04 trillion in market value in a single day. The irony is that just the day before, the Dow had surged 1,569 points to celebrate the election results being finalized. Then, in the blink of an eye, the market mood changed.
We thought uncertainty had lifted, but new concerns emerged: Can AI keep burning through cash at this pace? Will these investments actually pay off?
There are three main reasons behind this sell-off:
First, data center approvals may face tighter restrictions. Democrats made gains in several key areas, prompting concerns that changes to local approval policies could slow data center construction and, in turn, affect the AI computing supply chain.
Second, the returns on AI capital spending are being questioned. Alphabet's earnings report once again fueled concerns about the massive sums being poured into AI: How much of that investment will actually pay off in the future?
Third, talk of an AI bubble is heating up again. The key issue for Burry is chip depreciation. If chips lose value faster than companies expect, future profits may need to be reassessed.
So why did BTC plunge too?
The reason is simple: Risk assets across the U.S. stock market fell together, leveraged investors started pulling out, and BTC naturally couldn't escape the fallout. On top of that, the previous rally had built up plenty of unrealized gains, and concentrated selling pressure amplified the downturn. Ethereum fell even further, and liquidations across the crypto market also increased.
My take is that what’s really worth watching this time isn’t just the political factors, but the fact that the market’s valuation logic for AI—the dominant theme— is being challenged. These concerns may not be fully absorbed in the short term.
Back to BTC: around $81,000 is a key resistance zone, and the $78,000–$79,500 range is worth watching closely. If support gives way, the next level to watch may be $75,700, with around $72,000 as a further level of interest.
If BTC stabilizes around $75,000, you can watch for opportunities to build a position gradually. If it breaks below that level decisively, manage your risk promptly and don’t blindly buy the dip.
The more volatile the market gets, the more important it is to stay calm. Opportunities can wait, but protecting your capital comes first!
