In the ever-changing landscape of financial markets, a key signal has emerged—since March 2022, the S&P 500 index has recently drawn a noteworthy 'death cross' technical pattern for the first time. This indicates that its 50-day moving average has decisively crossed below the 200-day moving average, like an ominous lightning bolt cutting through the night sky, instantly illuminating the tense nerves of investors.
1. In-depth Analysis of 'Death Cross': A Warning from the Market's Barometer
From the classic perspective of technical analysis, the 'death cross' is by no means an ordinary crossover of moving averages; it acts like a 'prophet' of the market, frequently releasing key signals at critical moments. Throughout history, this pattern has often preceded short- to medium-term downward trends in the market, like a mournful song played by the market, suggesting that the stock market is about to enter a difficult adjustment period, with the balance of forces quietly tilting towards the bears.
2. The 'Lips and Teeth' Relationship of Cryptocurrencies: Is a Crypto Winter Returning Amidst Traditional Market Turbulence?
In today's increasingly intertwined financial ecosystem, traditional markets and the cryptocurrency realm have long been tightly connected by an invisible bond. The recent upheaval of the S&P 500 index undoubtedly acts like a giant stone thrown into a calm lake, creating ripples. As systemic risks in the traditional market sharply rise, panic spreads swiftly in investors' hearts, and risk aversion surges like a tidal wave.
Under the impact of this cold wave, major cryptocurrencies like Bitcoin and Ethereum will be the first to bear the brunt, while altcoins are teetering in the wind. In the short term, cryptocurrency prices are likely to come under downward pressure, especially considering the high correlation between cryptocurrencies and the stock market at present; the two seem to dance together like ships in a storm, one side sways, and the other cannot remain unscathed.
3. Concerns of Liquidity Crisis: The 'Life and Death Speed' Moment of the Crypto Market
However, the ripples of the crisis go far beyond this. If the S&P 500 index encounters a wave of panic selling, the crypto market may fall into a more severe 'liquidity exhaustion' predicament. Just as the human bloodstream is obstructed, once the flow of funds stagnates, trading will come to a standstill, market depth will be instantly drained, and the price discovery mechanism of various crypto assets will fail. The entire crypto ecosystem may face a test of 'life and death speed', and investors must fasten their seatbelts and be on high alert.
