Amid intensified selling pressure from US stocks and rising concerns about economic recession, the cryptocurrency market is encountering turbulent waves again. Bitcoin fell below the $80,000 mark early today (11th), reaching a low of $76,784, a new low since last November.

Worryingly, the 'capital flight' from Bitcoin spot ETFs has not shown any signs of easing, with an outflow of $867 million last week and a cumulative net outflow of $4.75 billion over the past four weeks, indicating that institutional funds are still retreating and market confidence is weak.

Reason for the crash: recession ➡️ US stocks ➡️ cryptocurrency market

The real key remains the uncertainty in the global economic outlook. During an interview over the weekend, Trump did not rule out the possibility of the US economy falling into recession, which further intensified market panic, leading to a broad decline in risk assets. The combined market value of the 'Seven Giants' dropped by over $830 billion on Monday, setting a record for the highest single-day market value loss.

As the mainstreaming of cryptocurrencies progresses, the correlation between the market and US stocks is becoming increasingly strong. Looking back at the market trends from last night to this morning, it can be said that the dismal performance of US stocks triggered the sharp decline in the cryptocurrency market.

Currently, positive news has been exhausted, and there is a lack of clear positive news catalysts in the short term. The cryptocurrency market remains influenced by global economic uncertainties, so this week, I suggest closely monitoring a few key economic data points, such as the 'Consumer Price Index' (CPI) released on Wednesday (12th) and the 'Producer Price Index' (PPI) on Thursday (13th).

This data may influence the market's expectations for the Federal Reserve's (Fed) future interest rate policy, and will also affect the subsequent direction of the cryptocurrency market.

Is the market bottom still not visible?

As of the time of writing, the price of Bitcoin is $80,392, down 27.1% from the historical high of $109,000 set in January this year. When can we buy at the bottom? Where is the bottom? This is a concern for many investors recently.

Over the past two weeks, the funding rates for Bitcoin perpetual futures have fluctuated between positive and negative, reflecting extreme market anxiety.

Generally speaking, in a bull market, funding rates usually maintain 'positive values', while 'negative values' often appear during phases of extreme market panic and price bottoms.

For instance, during events like the COVID-19 cryptocurrency disaster in 2020 and the FTX collapse in 2022, the funding rates saw significant negative values accompanied by market lows.

However, this market trend is different from previous ones; whenever Bitcoin attempts to rebound, the price falls again, and there hasn't been a long period of negative funding rates, indicating that the market is still hesitant and has not formed a clear bottom.

Currently, the market bottom is not clearly defined, but there's no need to worry; be patient and don't rush.

It's important to know that in a bull market, a 20% or 30% pullback is quite normal. Then, we need a free-fall drop in the US stock market, followed by the bankruptcy of major players in traditional finance. After that, the Fed and central banks will start injecting liquidity to save the market, and that's when you should go all in.

If you want to be more conservative, you can wait until major central banks begin to inject liquidity before increasing your positions. You may not perfectly catch the bottom, but you won't have to endure a long consolidation period and potential losses.

Market conditions are born in despair, and the market low is approaching. Once a rebound occurs at this time, there will inevitably be a rapid surge, and short sellers may become anxious and rush to cover their positions due to a slight increase, while long buyers may feel that the bottom has arrived, leading to a rapid rebound.

A US recession will also encourage the Fed to inject liquidity, and at that time, the market will explode in a comprehensive way, so get ready for the bull market expectations in the second half of the year!