Tag Archives: plunges

Crypto plunges, big tech earnings are strong. So why are markets nervous?

Crypto plunges, big tech earnings are strong. So why are markets nervous?

US equity futures advanced in early trading, with Nasdaq 100 futures gaining 0.9 per cent and S&P 500 futures up 0.4 per cent in Asian sessions, supported by strong after-hours results from Alphabet and Amazon.

This optimism meets a sobering reality as Brent crude surged 1.9 per cent to US$120.30 a barrel, a level not seen since mid-2022, driven by uncertainty over a potential blockade of the Strait of Hormuz. The Federal Reserve’s decision to hold interest rates steady at 3.50 per cent to 3.75 per cent on Wednesday, with Chair Powell explicitly citing elevated inflation and geopolitical uncertainty, sets a cautious tone that permeates every asset class.

Corporate earnings provide both relief and concern. Alphabet and Amazon shares climbed in late-session trading, reinforcing the ongoing AI-investment boom that continues to drive capital allocation across technology. Meta Platforms told a different story, slumping in after-hours trading as investors questioned the sustainability of its high capital expenditure levels.

Qualcomm’s 13 per cent rally on significant progress in the data-centre market signals that semiconductor demand remains robust beyond traditional end markets. All eyes now turn to Apple, set to report earnings today, which will serve as the final major test for the Magnificent Seven this season. The divergence among these names reflects a market that is increasingly selective about which growth narratives merit premium valuations in a higher-rate environment.

Geopolitical tensions dominate the macro backdrop. Reports of a US naval blockade and an escalating conflict in Iran have injected volatility into energy markets, while the UAE’s reported exit from OPEC adds another layer of supply-side uncertainty. Asian shares fell at the open on Thursday, with the ASX 200 also opening lower as investors reacted to the oil shock.

The Core PCE Price Index data for March, expected during this session, will serve as a critical input for the Fed’s next policy assessment. This confluence of factors creates a market environment in which traditional correlations break down, and risk assets face heightened scrutiny.

Within this complex backdrop, crypto-focused equities tell a particularly revealing story. Listed crypto plays experienced a broad sell-off, with Robinhood dropping about 14 per cent after reporting a 47 per cent year-over-year collapse in crypto transaction revenue. Coinbase, Bullish, Gemini, Riot, and Marathon all declined roughly six to eight per cent on the day, while MicroStrategy fell about four per cent.

Across the same window, Bitcoin traded just below US$76,000, down only 0.5 per cent to 1.5 per cent. This divergence underscores a critical distinction that many investors overlook: crypto-linked equities behave more like leveraged technology and fintech exposures than like Bitcoin itself.

From my perspective, this dynamic reflects a fundamental misunderstanding of how macro forces transmit through different layers of the digital asset ecosystem. When oil prices surge toward US$120 a barrel, headline inflation expectations rise, pushing Treasury yields higher and compressing multiples for long-duration, speculative equities.

Crypto exchanges depend on trading volumes that have already weakened, while miners operate capital-intensive businesses perceived as highly cyclical. These characteristics make their stocks particularly sensitive to shifts in macro risk appetite, even when the underlying cryptocurrency demonstrates relative resilience.

The market’s reaction reveals that investors still price crypto equities through a traditional growth-stock lens rather than appreciating the unique value accrual mechanisms of decentralised protocols.

Three variables warrant close attention moving forward.

  • First, oil prices and war headlines: sustained crude above US$100 per barrel keeps inflation pressure elevated and delays the timeline for rate cuts, creating a persistent headwind for high-beta crypto equities.
  • Second, central bank signals: if the Fed or other major central banks adopt a more hawkish stance in response to energy-driven inflation, equity multiples for speculative sectors face further compression.
  • Third, sector fundamentals: upcoming earnings from listed exchanges and miners will reveal whether the current selloff reflects pure macro beta or signals weakening business models. Crypto volumes, fee trends, power costs, and pivots toward AI and high-performance computing will all factor into this assessment.

The latest slide in crypto-related stocks reflects a macro shock rather than a crypto-specific failure. Surging oil prices feed inflation worries, pin interest rates higher, and punish high-beta, speculative equities across the board.

For investors navigating this landscape, the key distinction is recognising that listed brokers and miners have dual exposure: they participate in Bitcoin cycles while remaining vulnerable to energy-driven macro cycles. Monitoring oil trajectories, Fed expectations, and sector-specific earnings becomes essential when assessing risk in these vehicles versus holding the underlying digital assets.

Mainstream narratives often conflate spot crypto performance with equity proxies, but the transmission mechanisms differ substantially. In a world where geopolitical risk and monetary policy intersect with technological innovation, clarity about these distinctions separates informed positioning from reactive trading.

The path forward demands attention to both the macro forces shaping all risk assets and the unique fundamentals driving decentralised networks. Only by holding both lenses can investors navigate the volatility ahead with conviction rather than confusion.

 

Source: https://e27.co/crypto-plunges-big-tech-earnings-are-strong-so-why-are-markets-nervous-20260430/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Markets on edge: AI rally fizzles as crypto plunges below US$2.42 trillion

Markets on edge: AI rally fizzles as crypto plunges below US$2.42 trillion

Investors grappled with stretched valuations and growing doubts about the sustainability of Wall Street’s AI-driven rally. The mood shifted noticeably risk-off, not because of any sudden macroeconomic shock, but due to a quiet accumulation of concerns. Chief among them was whether the market had priced in too much optimism too soon. This unease was compounded by mixed US economic data that painted a picture of an economy slowing just enough to unsettle markets without triggering outright alarm.

The ADP employment report for January showed only 22,000 jobs added, well below the expected 45,000, signalling potential softness in the labour market. At the same time, the ISM Services index came in slightly above expectations at 53.8, suggesting pockets of resilience in the services sector. Together, these indicators created ambiguity, enough to fuel speculation that the Federal Reserve might need to act sooner rather than later, especially with Chair Jerome Powell set to step down in May.

Equity markets reflected this tension. The Dow Jones Industrial Average edged up by 0.53 per cent, buoyed by more defensive or cyclical components, while the S&P 500 slipped 0.51 per cent and the Nasdaq plunged 1.51 per cent. The divergence underscored a rotation away from the tech-heavy leadership that has dominated since late 2024. Software stocks bore the brunt of the selloff, revealing investor fatigue with sky-high multiples and limited near-term earnings visibility for most companies outside a narrow band of AI beneficiaries.

The VIX, Wall Street’s fear gauge, climbed to 18.64, its highest level in weeks, confirming rising anxiety beneath the surface. In this environment, broadening exposure beyond mega-cap tech makes strategic sense. Hence the renewed appeal of equal-weighted or low-volatility equity indices, as well as selective cyclicals like financials and industrials, and defensives such as certain healthcare segments.

Bond markets offered little clarity. Treasury yields moved in opposite directions. The 2-year yield fell 1.6 basis points to 3.553 per cent, reflecting bets on earlier rate cuts, while the 10-year yield rose slightly to 4.274 per cent, suggesting some investors still see inflation risks lingering in the longer term. The US Treasury’s decision to hold auction sizes steady provided no new supply shocks, but it also removed any near-term catalyst for duration extension. Still, the expectation of two Fed rate cuts in the second and third quarters of 2026 supports a gradual move toward longer-duration, high-quality fixed income, particularly in developed and emerging market investment-grade debt.

Currency markets mirrored the dollar’s resilience amid uncertainty. The DXY rose 0.18 per cent to 97.616, with the greenback gaining across all G10 pairs. USD/JPY jumped to 156.86, driven partly by political developments in Japan, where Prime Minister Sanae Takaichi’s anticipated election win is expected to usher in aggressive fiscal and defence spending. Despite this short-term strength, the structural outlook for the dollar remains bearish. With the Fed likely to pivot toward easing while other central banks hold steady or tighten modestly, the path of least resistance for the DXY is downward. EUR/USD, currently at 1.1807, stands to benefit, as does a broader weakening of USD/JPY over time.

Commodities told a story of geopolitical risk meeting long-term fundamentals. Brent crude surged two per cent to US$68 per barrel amid conflicting signals on US-Iran relations. While diplomatic talks are scheduled in Oman, President Trump’s renewed warnings and visible military buildup in the region stoked fears of escalation. That tension could easily push oil back toward last June’s peak of US$80, even though OPEC’s planned supply increases should cap prices over the medium term.

Meanwhile, gold rose to US$4,964 per ounce and silver jumped 3.5 per cent to US$85, both benefiting from safe-haven demand and dovish rate expectations. The precious metals complex remains fundamentally strong, though prone to sharp swings as macro narratives shift.

In Asia, markets staged a mild relief rally. South Korea’s Kospi hit a record high, up 1.6 per cent, while China’s Shanghai Composite gained 0.8 per cent, lifted by solar stocks reportedly boosted by visits from teams linked to SpaceX and Tesla. This subtle but telling signal pointed to renewed foreign interest in China’s green tech sector.

The crypto market buckled under macro pressure. Total market capitalisation dropped 6.61 per cent to US$2.42 trillion, led by Bitcoin’s decline. Notably, crypto’s correlation with traditional assets remains elevated, 72 per cent with the S&P 500 and 88 per cent with gold, confirming its current role as a rates- and dollar-sensitive risk asset rather than a true hedge.

A violent unwind of leveraged positions accelerated the fall, with US$654 million in liquidations in 24 hours, including US$197 million in Bitcoin alone. The Crypto Fear & Greed Index plummeted to 11, deep into Extreme Fear territory and its lowest reading since November 2025. This suggests the market is in a capitulation phase, where price action is driven less by fundamentals and more by forced deleveraging.

The immediate focus now rests on the US$2.42 trillion support level. Holding here could spark a technical bounce toward US$2.61 trillion, the 78.6 per cent Fibonacci retracement. But a break lower opens the door to US$2.28 trillion. With US Initial Jobless Claims due later today, any sign of labour market deterioration could reinforce expectations of Fed easing, but also deepen risk aversion in the short run.

For now, the confluence of technical breakdowns, leveraged unwinds, and souring macro sentiment has created a fragile equilibrium. The next 24 to 48 hours will be decisive in determining whether this pullback marks a healthy reset or the start of a deeper correction.

 

Source: https://e27.co/markets-on-edge-ai-rally-fizzles-as-crypto-plunges-below-us2-42-trillion-20260205/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Fed cuts rates but crypto plunges: The liquidity trap no one’s talking about

Fed cuts rates but crypto plunges: The liquidity trap no one’s talking about

The market rally following the Federal Reserve’s third consecutive 25 basis point interest rate cut of 2025 appears, at first glance, to signal renewed optimism across traditional asset classes. Equities responded positively, with the Dow Jones rising 1.05 per cent, the S&P 500 gaining 0.67 per cent, and the Nasdaq closing up 0.33 per cent. Bond yields retreated in tandem, with the 10-year US Treasury yield falling more than three basis points to 4.15 per cent and the two-year yield dropping over seven basis points to 3.54 per cent.

The dollar weakened broadly, especially against the yen, which gained ground as markets priced in a potential Bank of Japan rate hike in December. Even commodities reflected a cautious optimism, with Brent crude ticking up 0.44 per cent to US$62.21 per barrel amid heightened geopolitical tensions, and gold climbing 0.7 per cent to US$4236.57 per ounce as a defensive hedge.

Beneath this surface calm, the cryptocurrency market tells a very different story. Bitcoin and the broader digital asset complex declined by 2.82 per cent over the past 24 hours, extending a 14.1 per cent monthly drawdown. The Fed’s latest policy manoeuvre, which also included an announcement of US$40 billion in monthly Treasury purchases commencing December 12, effectively a stealth quantitative easing program, failed to ignite bullish sentiment in crypto.

Instead, the market interpreted the move not as a bold affirmation of economic strength, but as a reactive response to deteriorating growth prospects and mounting stagflationary pressures. This perception has triggered a significant reallocation of risk within crypto, where investors are abandoning speculative altcoins in favor of Bitcoin’s relative stability, pushing Bitcoin dominance to 58.54 per cent, a 30-day increase of 1.77 percentage points.

The disconnect between traditional markets and crypto hinges on liquidity expectations, leverage dynamics, and the unique structural vulnerabilities of digital asset markets at this point in the cycle. Unlike equities, which benefit from long-standing institutional infrastructure and predictable seasonal flows, crypto markets operate in a more volatile, sentiment-driven ecosystem that is acutely sensitive to shifts in macro liquidity, especially near year-end.

Analysts such as Adam from Greeks.live have highlighted the historical tendency for crypto liquidity to dry up in the final weeks of the calendar year. This seasonal tightening amplifies any macro uncertainty, turning minor corrections into cascading liquidations when leverage is high.

And leverage was indeed high. Over the past 24 hours alone, US$94 million in long positions were liquidated in Bitcoin markets, with 61 per cent of those forced closures hitting leveraged longs. Total open interest across crypto derivatives markets contracted by 4.34 per cent, while perpetual funding rates, though nominally positive at +0.0023 per cent, failed to provide meaningful price support.

The US$1.25 trillion in daily derivatives volume, a 14.3 per cent increase day-over-day, did not reflect fresh accumulation or conviction buying, but rather panic-driven unwinding by retail traders who had overextended during Bitcoin’s November rally. This dynamic underscores a fragile market structure, one that rallies on euphoria but collapses rapidly when sentiment shifts, especially in the absence of strong institutional demand.

The exodus from altcoins further illustrates this risk-off posture. Tokens like Solana and Sui, which had previously benefited from speculative inflows during periods of macro complacency, dropped between five and eight per cent as investors rotated into Bitcoin. The Altcoin Season Index now stands at just 17, deep in “Bitcoin Season” territory. This flight to safety within the crypto ecosystem mirrors broader macro trends, where institutions are trimming high-beta exposures ahead of anticipated volatility in 2026.

Notably, the 30-day correlation between crypto and the Nasdaq-100 has climbed to +0.48, while Bitcoin’s 24-hour correlation with the index sits at +0.39. These figures confirm that crypto is no longer operating in a vacuum; it is increasingly tethered to the same macro anxieties that drive equity markets, particularly around interest rate trajectories, inflation persistence, and growth sustainability.

From a strategic standpoint, this environment demands a reassessment of traditional crypto narratives. For years, proponents argued that digital assets would decouple from legacy markets and serve as an alternative store of value or inflation hedge. The data from this latest cycle suggests the opposite. Crypto’s fate remains tightly bound to US monetary policy and risk sentiment.

The Fed’s decision to cut rates while simultaneously launching asset purchases should, in theory, have flooded the system with liquidity and supported risk assets. Markets read between the lines. The fact that the Fed felt compelled to act while growth indicators remain ambiguous signals underlying weakness, not strength. In such conditions, capital gravitates toward assets with the clearest fundamentals and deepest liquidity, which, within crypto, means Bitcoin and little else.

Looking ahead, two critical levels will determine whether this selloff evolves into a deeper correction or merely a year-end consolidation. First, Bitcoin must hold the US$89,500 support level. A decisive break below this threshold could trigger cascading margin calls, especially given the elevated leveraged positioning still present in the market. Second, the ETH/BTC ratio, currently at 0.0214 and nearing 2025 lows, will serve as a barometer for altcoin sentiment. A sustained rebound above this level could indicate that risk appetite is returning to the broader ecosystem.

The central question now is whether January’s traditional “risk-on” seasonal patterns, historically a strong period for crypto due to post-holiday capital reallocation and tax-loss harvesting reversals, will be powerful enough to override the macro headwinds building for 2026.

With the Fed Funds Target Rate now at 3.50 to 3.75 per cent and further cuts anticipated in the second and third quarters of 2026, bringing the rate down to 3.25 per cent by year-end, the path of monetary policy appears accommodative on paper. If inflation proves sticky or growth falters further, even these cuts may not suffice to restore confidence in risk assets.

In this context, the crypto market’s reaction to the latest Fed move reflects not just short-term technical weakness, but a deeper reassessment of its role in the global financial system. As institutional adoption matures, digital assets are shedding their reputation as a purely speculative frontier and becoming subject to the same macro forces that govern traditional markets.

That integration brings legitimacy, but also vulnerability. For investors navigating this transition, the key will be distinguishing between structural value and cyclical noise, and recognising that in times of uncertainty, even within a decentralised ecosystem, capital seeks safety first, innovation second.

 

Source: https://e27.co/fed-cuts-rates-but-crypto-plunges-the-liquidity-trap-no-ones-talking-about-20251211/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j