February 2nd, 2026

Risk assets retreat under macro pressure: Gold, crypto, and tech lead the decline

The global markets entered a state of cautious recalibration as risk sentiment softened amid a confluence of political, monetary, and liquidity-driven pressures. The catalyst for the shift was President Donald Trump’s nomination of former Federal Reserve Governor Kevin Warsh as the next chair of the Federal Open Market Committee.

While the announcement aimed to reassure markets about the Fed’s institutional independence, it simultaneously stoked fears of a more hawkish policy trajectory than previously anticipated. This development coincided with a brief partial government shutdown over the weekend, though lawmakers are expected to swiftly pass a funding agreement once the House reconvenes. Against this backdrop, investors turned their attention toward Friday’s January employment report, which may offer critical clues about labour market fragility and, by extension, the timing of future rate cuts.

Equity markets reflected this growing unease. On Friday, the Dow Jones Industrial Average fell 0.37 per cent, the S&P 500 dropped 0.43 per cent, and the tech-heavy Nasdaq slid 0.94 per cent, weighed down by profit-taking in leading technology names. The VIX index, a barometer of market volatility, climbed to 17.44, signalling rising investor anxiety.

With major tech earnings from Alphabet, Amazon, and Palantir on deck, the sector faces renewed scrutiny not just on fundamentals but on its sensitivity to macro conditions. The prevailing view remains that the US economic recovery is uneven, warranting a strategic pivot toward broader diversification through vehicles like the S&P Equal Weighted or Low Volatility Index, rather than continued concentration in mega-cap tech. Beyond artificial intelligence narratives, select cyclicals such as financials and industrials, along with defensive healthcare segments, appear increasingly attractive.

Fixed income markets reacted with nuance to the Warsh nomination. The two-year Treasury yield declined by 3.7 basis points to 3.522 per cent, while the ten-year yield edged up slightly by 0.4 basis points to 4.235 per cent. This flattening at the short end suggests markets priced in a potential delay in near-term rate cuts, given Warsh’s reputation for monetary conservatism.

Nevertheless, the baseline expectation holds for two rate reductions in the second and third quarters of 2026, contingent on labor market deterioration. In this environment, extending bond duration to the five-to-seven-year range and accumulating high-quality fixed income, particularly in developed and emerging market investment grade, offers a prudent hedge against both volatility and eventual easing.

Currency markets mirrored the dollar’s resilience. The US Dollar Index (DXY) rose 0.74 per cent to 96.991, with the euro falling to 1.1851 and the yen weakening to 154.78 against the greenback. Notably, Japanese Prime Minister Sanae Takaichi briefly fueled yen weakness by calling a softer currency a huge opportunity for exporters, a remark she later walked back. Despite the dollar’s short-term strength, the longer-term outlook anticipates depreciation, driven by expected Fed easing. Consequently, EUR/USD is positioned for gains, while USD/JPY should trend lower as broad-based dollar weakness takes hold.

Commodities experienced a historic collapse in precious metals. Gold plunged 8.9 per cent to US$4,894 per ounce, and silver cratered 26.4 per cent to US$85, an unprecedented single-day decline for both. The selloff stemmed not from fundamental supply-demand shifts but from a systemic liquidity crunch that forced leveraged positions across asset classes to unwind.

Meanwhile, Brent crude dipped 0.4 per cent to US$69 per barrel as President Trump signalled openness to negotiations with Iran, reducing immediate geopolitical risk premiums. The outlook for oil remains cautiously negative, while gold’s role as a defensive hedge endures despite its recent volatility.

In Asia, regional equities followed global trends lower, with Hong Kong’s Hang Seng tumbling 2.1 per cent and Taiwan’s TWSE retreating 1.5 per cent. Profit-taking dominated amid elevated volatility in both crypto and precious metals markets. The strategic stance remains overweight on emerging market Asia, with particular emphasis on China’s tech and dividend-paying stocks, Korea and Taiwan’s semiconductor leaders, and Singapore within ASEAN.

The crypto market, now valued at US$2.53 trillion, declined 5.04 per cent over 24 hours, closely tracking the S&P 500 with a 67 per cent correlation. This underscores crypto’s current identity as a macro-sensitive risk asset rather than a standalone store of value. The primary driver was a severe US dollar liquidity shortage, as highlighted by macro investor Raoul Pal, who attributed the US$250 billion crypto drawdown to capital flight from long-duration assets like Bitcoin and tech equities. Compounding this, the Warsh nomination dimmed hopes for imminent rate cuts, tightening financial conditions further.

Secondary factors amplified the decline. The Fear & Greed Index plummeted to 15, its lowest since November 2025, while US$110 million in Bitcoin long positions were liquidated, triggering a cascade of forced selling. In a market with thin liquidity and high leverage, such dynamics can rapidly spiral into self-fulfilling panic.

Looking ahead, Bitcoin’s ability to hold the US$75,000 to US$78,000 support zone will dictate near-term direction. A daily close below US$75,000 could open the door to a test of the yearly low near US$2.42 trillion. Conversely, stability above this band and ideally a reclaim of the US$2.6 trillion level could signal a technical rebound. However, until macro liquidity conditions improve or institutional ETF flows turn decisively positive, the path of least resistance remains downward. The week ahead will test whether markets can find a floor or if deeper deleveraging lies ahead.

Source: https://e27.co/risk-assets-retreat-under-macro-pressure-gold-crypto-and-tech-lead-the-decline-20260202/

Anndy Lian

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

October 17th, 2025

Perfect storm: Trade war fears, leverage unwind, and institutional retreat crush crypto

The global financial landscape entered a period of pronounced fragility this week as a confluence of macroeconomic shocks, technical breakdowns, and institutional retrenchment converged to pressure risk assets across the board.

Nowhere was this more evident than in the cryptocurrency market, which shed 2.39 per cent over the past 24 hours and extended its weekly decline to 10.83 per cent. The sell-off did not occur in a vacuum. Instead, it unfolded against a backdrop of escalating geopolitical friction, banking sector stress, and shifting central bank narratives that collectively amplified risk-off sentiment and triggered a cascade of forced liquidations.

The immediate catalyst for the latest leg down came from former US President Donald Trump, who on October 10 announced a sweeping proposal to impose 100 per cent tariffs on all Chinese imports, effective November 1, alongside new export controls on critical software technologies.

The announcement rattled global markets. Within hours, Bitcoin tumbled 3.5 per cent to US$107,500, while altcoins suffered even steeper losses ranging from 15 per cent to 60 per cent. The move reignited fears of a full-blown trade war between the world’s two largest economies, prompting investors to flee speculative assets in favour of traditional safe havens.

Gold responded accordingly, climbing to a record US$4,361 per ounce, a 2.1 per cent gain, while the US Dollar Index softened by 0.46 per cent to 98.34. The Russell 2000 Index, a barometer of domestic risk appetite, fell 1.2 per cent, underscoring the breadth of the risk aversion.

What made this episode particularly significant for crypto was the reestablishment of a near-perfect correlation with traditional equities. Over the past 24 hours, Bitcoin’s price movement tracked the S&P 500 with a correlation coefficient of 0.948, the highest since 2023. This tight linkage signalled a return to the risk-on, risk-off regime that dominated markets during the post-pandemic monetary tightening cycle.

In such an environment, crypto loses its identity as an uncorrelated asset and instead trades as a high-beta extension of the tech sector. With US equities already under pressure, Dow Jones down 0.65 per cent, S&P 500 down 0.63 per cent, Nasdaq down 0.47 per cent, the path of least resistance for Bitcoin became unmistakably lower.

Compounding the macro headwinds was a decisive technical breakdown in Bitcoin’s price structure. After consolidating for weeks within the US$115,000 to US$123,000 range, the flagship cryptocurrency finally breached the lower bound of that zone, closing decisively below US$115,000. This move invalidated a key support level that had held through multiple tests and opened the door to deeper downside. Technical analysts noted the emergence of a potential double-top pattern, with bearish confirmation hinging on a weekly close below US$110,000.

Adding to the negative momentum, both the 20-day and 50-day moving averages turned downward, while the Relative Strength Index (RSI) plunged to 31.67, deep into oversold territory but not yet signalling a reversal. Futures market data revealed that open interest had actually risen by 2.3 per cent in the days leading up to the crash, suggesting that short sellers had positioned aggressively ahead of the breakdown, anticipating exactly this kind of macro-driven selloff.

Perhaps the most destabilising element of this week’s decline was the scale and speed of the leverage unwind. On October 16 alone, over US$724 million in crypto positions were liquidated across major exchanges, with long positions accounting for a staggering 74 per cent of that total.

This lopsided distribution pointed to excessive bullish positioning among retail traders, who had been riding the coattails of recent institutional inflows. The average funding rate across perpetual futures markets stood at +0.0052 per cent, reflecting persistent long-side pressure that left the market vulnerable to a sharp reversal.

When the macro shock hit, the resulting price drop triggered a domino effect. Margin calls forced leveraged longs to sell, which pushed prices lower, which triggered more liquidations. This feedback loop accelerated the decline and created a vacuum of buyers precisely when support was most needed.

Institutional participation, which had provided a crucial floor for prices in prior months, also pulled back sharply. Bitcoin ETF inflows, which surged to US$2.7 billion the previous week, collapsed to just US$571 million this week, a drop of US$2.129 billion. Grayscale’s GBTC alone saw US$22.5 million in outflows on October 16, marking a notable shift in sentiment among large players.

This cooling of institutional demand removed a key source of structural buying just as retail leverage was imploding. The result was a market caught between two stools: no longer buoyed by ETF-driven accumulation, and simultaneously crushed by retail deleveraging.

Meanwhile, central bank commentary added another layer of uncertainty. Federal Reserve Governor Stephen Miran, a voting member of the FOMC, signalled his intent to advocate for a half-percentage-point rate cut at the upcoming meeting, a dovish stance that initially supported risk assets but now appears at odds with persistent inflation concerns.

Conversely, Bank of Japan Governor Kazuo Ueda kept the door open for further rate hikes, stating that the BOJ would continue tightening if confidence in its economic outlook strengthens. These divergent policy paths contributed to volatility in global bond markets, with the 10-year US Treasury yield falling 7 basis points to 3.97 per cent and the two-year yield dropping 8 basis points to 3.42 per cent. While lower yields typically support risk assets, the move this week reflected safe-haven demand rather than genuine monetary easing expectations, offering little comfort to crypto traders.

Even geopolitical developments weighed on sentiment. President Trump’s announcement that he and Russian President Vladimir Putin would meet in Hungary to discuss ending the war in Ukraine introduced new uncertainty into energy markets. Brent crude fell 1.37 per cent to US$61.06 per barrel on fears that a negotiated settlement could ease sanctions and flood the market with Russian oil. While lower energy prices might normally support risk assets by curbing inflation, the opaque nature of the proposed talks raised concerns about broader geopolitical realignments that could destabilise existing alliances and trade flows.

Looking ahead, the critical level to watch remains US$110,000 for Bitcoin. A weekly close below this threshold would likely invite a wave of algorithmic selling and accelerate the move toward US$100,000. A strong bounce could signal that the worst of the deleveraging is over. Traders should closely monitor two key indicators in the coming days: US Treasury yields and Bitcoin ETF flows.

A reversal in ETF inflows, particularly if they return to the US$2 billion-plus levels seen recently, could provide the buying pressure needed to stabilise prices. Similarly, a stabilisation or decline in the 10-year yield would ease financial conditions and potentially reignite risk appetite.

Despite the current turbulence, Bitcoin’s underlying fundamentals remain robust. Network hash rate continues to hover near all-time highs, reflecting strong miner commitment and infrastructure investment. On-chain activity, while subdued during the selloff, has not shown signs of capitulation among long-term holders. This suggests that the current weakness is driven more by short-term leverage and macro sentiment than by a fundamental erosion of value.

In conclusion, the crypto market now navigates a perfect storm of external pressures and internal fragilities. The triple threat of trade war escalation, technical breakdown, and institutional pullback has exposed the limits of crypto’s decoupling narrative. Until macro conditions stabilise and leverage levels normalise, volatility will remain elevated, and the path to recovery will depend less on crypto-specific developments and more on the broader trajectory of global risk sentiment.

Source: https://e27.co/perfect-storm-trade-war-fears-leverage-unwind-and-institutional-retreat-crush-crypto-20251017/

Anndy Lian

www.anndy.com

j j j

July 8th, 2025

The tariff gambit: Markets retreat, crypto finds new footing

The United States announced reciprocal tariffs targeting 14 countries ahead of a critical July 9, 2025, deadline. This move, which marks the end of a 90-day grace period, has reignited fears of a trade war, sending shockwaves through equity markets, bond yields, and commodity prices.

At the same time, the cryptocurrency market, particularly Bitcoin and related investments, presents a mixed picture, with stagnation in Bitcoin’s price contrasted with significant gains in crypto infrastructure stocks like Coinbase.

I’ll weave together the facts, data, and market reactions to offer a detailed perspective on these developments and their broader implications.

The tariff announcements: A bold move with global repercussions

On July 7, 2025, President Donald Trump took to social media to announce a sweeping set of reciprocal tariffs aimed at 14 countries with which the United States maintains significant trade deficits. Effective August 1, 2025, these tariffs build upon an existing 10 per cent baseline rate and introduce additional duties on transshipped goods, which are products rerouted through third countries to evade tariffs.

The announcement included a stern warning: any retaliatory measures by the affected nations would trigger a further 25 per cent increase in tariffs. Among the standout figures are the 25 per cent tariffs imposed on imports from Japan and South Korea, two of America’s closest allies and major exporters of automobiles, electronics, and industrial goods.

The list of targeted countries also includes Malaysia, Kazakhstan, South Africa, Laos, Myanmar, Bosnia and Herzegovina, Tunisia, Indonesia, Bangladesh, Serbia, Cambodia, and Thailand.

Letters sent to the leaders of these nations outlined the new rates and hinted at flexibility, noting that tariffs could be adjusted “upward or downward” based on future bilateral relations. This ambiguity has only heightened the uncertainty surrounding the policy’s long-term impact.

The European Union emerged as a positive outlier in this saga. Unlike the 14 targeted nations, the EU did not receive a tariff letter, and reports indicate that a preliminary deal may be struck this week to lock in a 10 per cent tariff rate beyond the August 1 deadline. This temporary reprieve, as negotiations for a permanent agreement continue, has offered a glimmer of hope amid an otherwise tense situation.

This tariff strategy reflects a calculated gamble by the US administration to address trade imbalances and assert economic dominance. However, it risks alienating key allies like Japan and South Korea, whose economies could suffer significant blows.

The threat of retaliation looms large, and the potential for a tit-for-tat escalation could unravel years of trade cooperation. The EU’s apparent exemption, meanwhile, suggests a pragmatic approach to preserving critical transatlantic ties, though the outcome of ongoing talks remains uncertain.

Market reactions: A retreat from highs and a flight to safety

The financial markets wasted no time reacting to the tariff news. US tariff hikes spark global market turmoil while crypto infrastructure stocks surge, highlighting shifting investor priorities and risks equities, which had been riding a wave of optimism to all-time highs, pulled back sharply. The S&P 500 and Nasdaq each declined by 0.8 per cent, while the Dow Jones Industrial Average shed 1.0 per cent.

Megacap stocks, think tech giants and multinationals with heavy exposure to global trade, bore the brunt of the losses, reflecting their vulnerability to disruptions in international supply chains and higher import costs.

In the bond market, yields ticked upward as investors reassessed risk. The two-year US Treasury note rose by two basis points to 3.895 per cent, and the 10-year yield climbed 4 basis points to 4.39 per cent. This uptick suggests a market bracing for inflationary pressures, as tariffs could drive up the cost of imported goods and ripple through the US economy.

The US Dollar Index, a barometer of the greenback’s strength against major currencies, gained 0.3 per cent, signalling a flight to safety amid the uncertainty.

Commodities also felt the heat. Brent crude oil prices rose 1.0 per cent to US$71 per barrel, bolstered by Saudi Arabia’s unexpected decision to hike prices for its main crude grade in Asia. This move, combined with geopolitical tensions tied to the tariffs, has stoked fears of tighter energy markets in the near term. Gold, a traditional safe haven, held steady at US$3,337 per ounce, offering a rare pocket of stability in an otherwise volatile landscape.

Globally, the picture was mixed. Asian equity indices edged higher in early trading, buoyed by hopes of additional negotiations to soften the tariffs’ blow. However, US equity index futures pointed to a lower open, suggesting that Wall Street’s retreat may deepen in the days ahead.

These market movements underscore the fragility of the current economic recovery. The tariff announcement has punctured the bullish sentiment that had propelled stocks to record levels, exposing the interconnectedness of global markets. The rise in bond yields and the dollar’s strength hint at investor unease, while the oil price jump highlights the broader inflationary risks at play.

For everyday consumers, this could translate to higher prices at the pump and the checkout counter—a tangible reminder of how distant trade policies hit home.

Bitcoin and crypto markets: A tale of stagnation and surprising resilience

Amid the tariff-induced turmoil, the cryptocurrency market offers a fascinating subplot. Bitcoin, the bellwether of the cryptocurrency world, has struggled to regain its momentum after reaching a peak of US$111,000 in May 2021. Since then, it has hovered stubbornly below the US$100,000 mark, with recent trading showing a 1.5 per cent decline over 24 hours.

Tom Lee, managing partner at Fundstrat Global Advisors, attributes this stagnation to profit-taking by early investors. “We have clients that have bought Bitcoin at US$100,” Lee remarked on CNBC’s ETF Edge. “They don’t care if Bitcoin goes to a million; they are probably sellers at around US$100,000.”

This insight resonates with me. Bitcoin’s meteoric rise over the years has created a cohort of holders sitting on astronomical gains. For them, cashing out at US$100,000—still a staggering return—makes sense, especially in a climate of heightened global risk. The psychological barrier of that six-figure threshold, coupled with profit-taking, seems to be capping Bitcoin’s upside for now.

Yet, the broader crypto ecosystem tells a different story. Coinbase, a leading digital assets infrastructure provider, has defied Bitcoin’s lethargy with a remarkable 40 per cent surge in June 2025—its best month since November 2024.

The stock doubled in the second quarter, making it the only S&P 500 constituent to achieve that feat, and capped the period with its first three-month rally since 2023. Several catalysts have fueled this rally: the Senate’s passage of the Genius Act, the successful IPO of Circle, and growing enthusiasm for stablecoins.

The Genius Act, a bipartisan effort to regulate cryptocurrencies, promises to bring clarity and legitimacy to the industry, potentially unlocking greater institutional investment. Circle’s IPO, which raised US$1.2 billion and valued the company at US$12 billion, has spotlighted the rise of stablecoins like USDC, now boasting a market cap exceeding US$50 billion.

Stablecoins, pegged to assets like the US dollar, offer a hedge against crypto volatility, making them increasingly attractive as Bitcoin wavers.

Then there’s MicroStrategy, the self-styled “largest Bitcoin treasury company.” Between April 7 and June 29, 2025, it snapped up 69,140 Bitcoins for US$6.77 billion, at an average price of US$97,906 per coin. Its total holdings now stand at 597,325 Bitcoins, acquired for US$42.4 billion at an average of US$70,982 each—currently worth US$64.71 billion.

Yet, in a rare break from its aggressive buying, MicroStrategy paused purchases during the week of June 30 to July 6, the first such hiatus since early April. The stock slipped two per cent on July 7 as Bitcoin dipped, but the company signaled its intent to keep betting big, announcing a US$4.2 billion preferred stock offering to fund further Bitcoin acquisitions.

To me, MicroStrategy’s strategy epitomises the polarising nature of crypto investing. Its unwavering commitment to Bitcoin as a corporate asset is bold, even visionary, but the pause in buying hints at caution amid the tariff storm. Coinbase’s surge, meanwhile, reflects a market rewarding infrastructure over speculation—a shift that could redefine the crypto narrative in the months ahead.

Broader implications and my take

The tariff announcements carry profound implications beyond the immediate market gyrations. For Japan and South Korea, the 25 per cent tariffs threaten industries like automotive and tech, prompting responses like South Korea’s US$2 billion auto sector aid package and Japan’s pledge to “take appropriate measures.”

Globally, economists warn of disrupted supply chains, higher consumer prices, and slower growth, with the IMF already downgrading its forecasts. In the US, the Federal Reserve faces a dilemma: tariffs could stoke inflation, necessitating tighter policy, yet economic uncertainty might demand restraint.

In my view, the US is playing a high-stakes game that could backfire. The tariffs may bolster domestic industries in the short term, but the long-term cost, strained alliances, retaliatory measures, and inflation could outweigh the gains.

The crypto market’s resilience, particularly in stablecoins and infrastructure, offers a counterpoint to this chaos, suggesting that investors are seeking stability and innovation amid traditional market upheaval.

In conclusion, the tariff news has thrust global risk sentiment into a tailspin, with equities retreating, yields rising, and Bitcoin stalling. Yet, pockets of strength in the crypto space hint at a shifting financial paradigm.

As this story unfolds, the interplay of trade policy, market dynamics, and digital assets will shape the economic narrative for months to come—a saga worth watching closely.

Source: https://e27.co/the-tariff-gambit-markets-retreat-crypto-finds-new-footing-20250708/