1. The sharp decline in U.S. stocks of cryptocurrency: not an isolated event, but a "leading signal" of sentiment in the cryptocurrency market.
Many people will ask: "The U.S. stocks of cryptocurrency have fallen, what does that have to do with the cryptocurrency market?" In fact, the connection between the two is much closer than imagined — the trend of U.S. stocks of cryptocurrency essentially serves as a "confidence barometer" for traditional capital in the cryptocurrency industry, and changes in this confidence often transmit to the cryptocurrency market through capital flows.
A review of historical trends reveals that whenever there is a large-scale decline in U.S. stocks of cryptocurrency, the cryptocurrency market is likely to "shake": for example, when Coinbase fell more than 10% in a single day due to regulatory news in 2023, Bitcoin dropped from $28,000 to $26,500 on the same day, a decline of nearly 5%; the continuous decline of a certain cryptocurrency mining company's stock before its bankruptcy also directly triggered a collective plunge in the mining coin sector. The logic behind this is simple: traditional investors holding cryptocurrency stocks may not only sell off their stocks when they become concerned about the industry's outlook, but may also simultaneously reduce their holdings of cryptocurrencies (such as Bitcoin and ETH) to avoid "double losses"; meanwhile, new funds entering the market, upon seeing negative signals in the stock market, may also adopt a wait-and-see attitude towards the cryptocurrency market, leading to a decrease in capital inflow into the cryptocurrency market.
This situation is more worthy of vigilance: it's not just a single stock decline, but a collective weakness of the entire sector. The sharp decline of BMNR may be related to market concerns about the profitability of cryptocurrency mining companies (recent fluctuations in computing power have led to a decrease in machine operating rates); the declines of Coinbase and Circle imply concerns about regulatory policies (the U.S. SEC is still reviewing cryptocurrency platforms). These concerns can transmit to the cryptocurrency market like a "domino effect": potential new investors may see the dire situation of U.S. stocks of cryptocurrency and temporarily shelve their plans to buy coins; existing investors may also choose to "withdraw part first," transferring funds to cash or gold and other safe assets, resulting in increased selling pressure in the short term in the cryptocurrency market.
2. Will the cryptocurrency market "follow the decline"? Key signals behind two possibilities.
In the face of the sharp decline in U.S. stocks of cryptocurrency, how will the cryptocurrency market move next? Currently, there are two possibilities, and the key lies in the signals of "capital flow" and "support levels":
The first possibility: a short-term emotional pullback, but not breaking key support. If Bitcoin can hold above $45,000 (the recent lower bound of the fluctuation range) and ETH can hold above $3,000, it indicates that market confidence in cryptocurrencies is still present — after all, the core logic of the cryptocurrency market (such as ETH's Layer 2 ecosystem and Bitcoin's ETF expectations) has not changed due to the decline in U.S. stocks of cryptocurrency, and the short-term drop is more a result of "emotional contagion" leading to follow-up selling. In this case, the pullback could actually become a "buying opportunity," especially for those mainstream coins (like SOL, ADA) that rose less earlier and have solid fundamentals, which may stabilize before the overall market.
The second possibility: breaking key support, triggering a chain of sell-offs. If Bitcoin falls below $45,000 and ETH falls below $3,000, along with increased trading volume (indicating that large funds are fleeing), then the cryptocurrency market may face a deeper adjustment — for example, Bitcoin could drop to $42,000 and ETH to $2,800. This situation often occurs when "market confidence is completely shaken," such as sustained declines in U.S. stocks of cryptocurrency (more than 3 consecutive days) or new regulatory negative news (like a major country implementing a cryptocurrency ban).
However, from the current market situation, the first possibility seems more likely: as of press time, Bitcoin is still fluctuating around $46,000, while ETH is hovering around $3,100. On-chain data shows that the net outflow of Bitcoin from exchanges has increased by 15% compared to yesterday (indicating that investors are "buying the dip"). This means that although sentiment is affected, true "panic selling" has not yet occurred, and the cryptocurrency market can temporarily withstand the impact of the decline in U.S. stocks of cryptocurrency.
3. Opportunities hidden in crises: these two types of opportunities are worth paying close attention to.
The cryptocurrency market has always been where "opportunity lies within crisis" — the pullback caused by the sharp decline in U.S. stocks of cryptocurrency may actually bring some quality targets back to "reasonable prices," especially these two types of opportunities, which investors should focus on closely:
The first type: mainstream coins with "strong anti-decline characteristics." For example, Bitcoin, ETH, and SOL, which have been active in the ecosystem recently. These coins are characterized by "high capital attention and clear support levels": there are substantial buy orders at $45,000 for Bitcoin, while $3,000 for ETH has been a support level tested multiple times previously, and around $180 for SOL, institutional funds are gradually increasing their holdings. If these coins undergo a pullback without breaking key support, it presents a "buying opportunity" — after all, their long-term logic (the safe-haven attribute of Bitcoin, the ecological value of ETH, the transaction efficiency of SOL) remains unchanged, and the short-term decline is merely an "emotional disturbance."
The second type: quality altcoins that are "wrongly killed." Some altcoins have good fundamentals (such as having real users within their ecosystem and ongoing technological updates), but due to the "emotional contagion" from the sharp decline in U.S. stocks of cryptocurrency, they are also driven down. For example, a certain DeFi protocol's token may have seen its TVL (Total Value Locked) grow recently, but its price has dropped by 10%. This is a "wrong kill" — as long as the core functionality of the protocol is not problematic, it is highly likely to "recover" after the pullback. However, it's important to note that when choosing altcoins, one must avoid "air coins" (coins without actual applications, relying solely on speculation), as these may "drop and not recover" during a pullback, or even go to zero.
In addition, there is a "hidden opportunity": the BNB-related ecosystem. Last night, among the U.S. stock market's cryptocurrency stocks, only the BNB concept stocks rose slightly against the trend, which may reflect the market's confidence in the BNB ecosystem — the daily active users of BNB Chain recently surpassed 2 million, and the activity of DeFi and NFT applications is also increasing. If there is a differentiation in the cryptocurrency market, BNB and quality tokens within its ecosystem (such as CAKE) may become a "safe haven choice," performing better than the overall market.
4. What should retail investors do? 3 operational suggestions to avoid "chasing highs and selling lows."
In the face of the current market situation, retail investors should not "panic sell" or "blindly bottom-fish," but rather "respond rationally." Remember these 3 pieces of advice:
Don't go all in; keep some "reserve funds": if your position has exceeded 70%, you can take advantage of the rebound to reduce it to below 50%, keeping some cash — in case the cryptocurrency market really experiences a deep decline, this cash will be the "bullets for bottom-fishing"; if your position is below 50%, there is no need to rush to increase your position, but wait for clear stabilization signals (such as Bitcoin not making new lows for 3 consecutive days and increased trading volume) before taking action.
Keep an eye on key support levels; stop loss if breached: set a "stop-loss line" for the coins you hold, for example, if Bitcoin falls below $45,000, reduce your position by 30%, and if ETH falls below $3,000, reduce your position by 20% — a stop loss is not "giving up," but rather avoiding "large losses" due to a small probability of deep declines. Especially for investors holding altcoins, the stop-loss line should be stricter, for instance, decisively exiting if it falls more than 10% below recent lows.
Look less at short-term fluctuations and focus more on long-term logic: do not get nervous by staring at the K-line every day, but spend more time studying the long-term logic of the coins you hold — for example, what changes will the next upgrade of ETH bring? What new applications have recently landed in the SOL ecosystem? As long as the long-term logic remains intact, short-term pullbacks are "benefits provided by the market," not "disasters."
The storms in the cryptocurrency market have always been "selectors."
The sharp decline in U.S. stocks of cryptocurrency is like a "small test" that challenges every investor's cognition and mentality. Some may panic and sell at the low, while others may blindly bottom-fish out of greed, but those who can truly make money are those who "understand the logic and maintain discipline" — they know that the storms in the cryptocurrency market have always been "selectors," washing away those who trade solely based on emotions and leaving those who truly believe in the value of cryptocurrency.
Currently, the core logic of the cryptocurrency market has not changed, and the sharp decline in U.S. stocks of cryptocurrency is more an "external emotional disturbance" than a "collapse of intrinsic value." For retail investors, instead of operating chaotically in panic, it is better to calm down and focus on key signals, waiting for their own opportunities — after all, real trends never come in a wave of optimism, but sprout in the "calm after the storm"!
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