"Liquidity is like oxygen, which is imperceptible at ordinary times, but instantly fatal when lost.
——Redd Leo, founder of Bridgewater Associates (Principles)”
The stock market has been in trouble recently due to Trump’s trade war and tariff shocks!
The correction in the past 30 days has exceeded 93% of the corrections in the past 5 years! The current correction is as severe as the market crash during the COVID-19 pandemic and the bear market in 2022.
The S&P 500 has experienced its biggest drop since March 2020, down 11%. At the same time, the index's 50-day moving average has been trending down and is close to forming a "death cross" - the 50-day moving average falls below the 200-day moving average.
Moreover, the index has broken below three key support levels of 5600, 5400, and 5200. If the market tests 5000, this level could act as a strong support point.
It is worth noting that historically the index has never fallen by more than 4% for more than two consecutive days.
Bitcoin has fallen slightly this week as it has outperformed the stock market, but given its strong correlation with risk assets, I do not expect Bitcoin to continue to act as a safe haven asset in the current environment.
Bitcoin and the stock market will tend to move in the same direction, with a correlation coefficient of 70% between Bitcoin and the Nasdaq 100 index over the past 60 and 90 days. This suggests that there is a greater chance that Bitcoin will “follow” the downward trend of stocks in the coming weeks.
Currently, the price of Bitcoin is below the daily 200-day moving average, 100-day moving average, 50-day moving average, and 25-day moving average. The price of Bitcoin cannot break (and maintain) above the 200-day moving average level.
In recent weeks, Bitcoin has shown some stability as Bitcoin spot ETF fund flows have remained neutral inflows. As long as large-scale outflows of spot ETF funds can be avoided, $73,000 will become the final reliable support level.
March was a typical risk-off environment! Gold’s strong performance reflects investors’ risk-averse tendencies in uncertain times, with the price of gold performing well and stabilizing above $3,000 per ounce, far exceeding the monthly average.
The fiasco in the altcoin market has been brutal!
The gap between Bitcoin and altcoins is becoming increasingly clear. While Bitcoin is under pressure after falling 20% from its early February high, altcoins have suffered even more severely.
If you bought Bitcoin with $100 in February, it would now be worth $82. Similarly, if you invested $100 in other altcoins, Ethereum would now be worth $55; Solana would be worth $53; ADA would be worth $70; XRP would be worth $33; and Dogecoin would be worth $52. Many smaller altcoins are in even worse shape, losing between 70% and 80% of their value.
Bitcoin’s dominance has surged to 63% over the past month, reaching its highest level so far in 2021. Altcoins’ total market share continues to decline, falling to 37% today.
Ethereum’s performance in the first quarter of 2025 can be described as “terrible”, with a drop of about 50%, making it the worst quarterly performance since 2018!
Ethereum, which was once highly anticipated, has gradually become a joke in 24 or 25 years, and its price has failed to reach the expected $5,000. So far, the price of Ethereum has even fallen below $1,800, which is disappointing!
Note: All content represents the author's personal views only, is not investment advice, and should not be construed in any way as tax, accounting, legal, business, financial or regulatory advice. Before making any investment decision, you should seek independent legal and financial advice, including advice on tax consequences.
