Crypto and US stocks are both falling, and market confidence is cooling! What will drive the next rally?
The market has certainly been a bit tough lately.
US tech stocks remain under pressure, while Bitcoin has also fallen below $70,000, with risk assets pulling back almost in tandem. The market is not just short on upward momentum; more importantly, investors are becoming cautious.
This downturn is not driven by a single factor.
On the one hand, inflationary pressure in the US remains relatively high, expectations for Fed rate cuts have cooled, and the dollar and Treasury yields have strengthened, reducing interest in high-risk assets.
On the other hand, AI stocks have also pulled back, and the market is starting to reassess AI companies’ valuations, capital expenditures, and future earnings potential. Bitcoin’s 30-day correlation with the Nasdaq briefly reached around 0.7, showing that BTC is still clearly influenced by risk appetite in US equities.
The crypto market is also facing pressure of its own.
Spot Bitcoin ETFs in the US have seen sustained net outflows, with about $1.66 billion flowing out over the past 30 days. Stablecoin supply is also shrinking, suggesting that new capital is temporarily in short supply. Meanwhile, leverage remains elevated, and a prolonged decline can trigger forced liquidations, amplifying volatility further.
So, what will drive the next rally?
I think there are several key variables worth watching closely:
A more favorable macro environment. If inflation continues to cool and expectations for Fed policy ease, pressure on market liquidity could lessen.
Institutional funds returning. A sustained return to net inflows into Bitcoin ETFs would be an important signal of confidence among traditional investors.
Stablecoin supply returning to growth. Stablecoins act as a liquidity reserve for the crypto market. Their supply needs to start expanding again to potentially provide more capital to support the market.
AI stocks stabilizing. If the Nasdaq and leading tech stocks regain favor with investors, that could also improve market sentiment toward BTC and other risk assets.
However, a rally should not be judged solely by a sudden price increase. More convincing signals would be a return of ETF inflows, stronger spot buying, a gradual decline in leverage, and a simultaneous improvement in stablecoin liquidity.
What the market may lack most right now is not a piece of good news, but real capital that continues to flow in.
#加密美股齐跌，下轮反弹的驱动力在哪？
The market has certainly been a bit tough lately.
US tech stocks remain under pressure, while Bitcoin has also fallen below $70,000, with risk assets pulling back almost in tandem. The market is not just short on upward momentum; more importantly, investors are becoming cautious.
This downturn is not driven by a single factor.
On the one hand, inflationary pressure in the US remains relatively high, expectations for Fed rate cuts have cooled, and the dollar and Treasury yields have strengthened, reducing interest in high-risk assets.
On the other hand, AI stocks have also pulled back, and the market is starting to reassess AI companies’ valuations, capital expenditures, and future earnings potential. Bitcoin’s 30-day correlation with the Nasdaq briefly reached around 0.7, showing that BTC is still clearly influenced by risk appetite in US equities.
The crypto market is also facing pressure of its own.
Spot Bitcoin ETFs in the US have seen sustained net outflows, with about $1.66 billion flowing out over the past 30 days. Stablecoin supply is also shrinking, suggesting that new capital is temporarily in short supply. Meanwhile, leverage remains elevated, and a prolonged decline can trigger forced liquidations, amplifying volatility further.
So, what will drive the next rally?
I think there are several key variables worth watching closely:
A more favorable macro environment. If inflation continues to cool and expectations for Fed policy ease, pressure on market liquidity could lessen.
Institutional funds returning. A sustained return to net inflows into Bitcoin ETFs would be an important signal of confidence among traditional investors.
Stablecoin supply returning to growth. Stablecoins act as a liquidity reserve for the crypto market. Their supply needs to start expanding again to potentially provide more capital to support the market.
AI stocks stabilizing. If the Nasdaq and leading tech stocks regain favor with investors, that could also improve market sentiment toward BTC and other risk assets.
However, a rally should not be judged solely by a sudden price increase. More convincing signals would be a return of ETF inflows, stronger spot buying, a gradual decline in leverage, and a simultaneous improvement in stablecoin liquidity.
What the market may lack most right now is not a piece of good news, but real capital that continues to flow in.
#加密美股齐跌，下轮反弹的驱动力在哪？