Recently, the US stock market has been booming, rising for five consecutive days, continually hitting new highs. However, the cryptocurrency market seems unfazed; Bitcoin and Ethereum not only failed to rise but also experienced slight declines. This situation is quite abnormal, and everyone is pondering what’s going on.
Data shows that there has been a significant influx of money into Bitcoin ETFs. Bitcoin ETFs have seen net inflows for 20 consecutive days; Ethereum ETFs have also largely experienced net inflows over the past month.
So why is it that with all this money coming in, the market isn’t rising? The key issue is that trading activity has dropped significantly. The trading volumes across major exchanges have noticeably shrunk, and spot trading is as quiet as it was during the lows of July and August last year. It’s as if the market has been muted, with a significant reduction in participants.
In this scenario, Bitcoin at least has ETF funds supporting it, helping to stabilize the situation; but those smaller cryptocurrencies without substantial backing are suffering badly, experiencing sharp declines when funds tighten.
Looking ahead, the market will likely continue to fluctuate for a while. The Federal Reserve has recently hinted that there may only be one rate cut this year, and it’s likely to be after September. This means the market will continue to be volatile without settling down.
However, opportunities are often hidden when no one is paying attention. The current market fear index is still at a moderate level, far from the panic stage. If one is optimistic about the long-term opportunities resulting from rate cuts in 2025 and 2026, it might be a relatively safe choice.
In this market condition, we need to remain patient, closely monitor market trends, and prepare for a protracted battle. This strange phenomenon of the market “not rising when it should” may hint at significant changes in the future, which is worth our attention and contemplation.
Market trends never believe in flowery language; only by following precise strategies can we keep pace with the rhythm of wealth, while those without a plan struggle to keep up.
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