Plunging $6 Trillion! Why did Bitcoin and the stock market suddenly crash? An in-depth look at the human game behind the flow of capital.

▍市場暴跌現狀：從「極度貪婪」到「極度恐懼」的驚人轉折

On Monday, the cryptocurrency market plummeted 4% in a single day, with Bitcoin falling below the $78,000 mark, evaporating 27% of market capitalization from its January all-time high of $107,000. Meanwhile, the US S&P 500 lost $1.4 trillion in a single day, the biggest drop since 2022.Cryptocurrency and Stock Markets Combine to Evaporate $6 Trillion in Just Three Months--This is equivalent to the total GDP of Japan, the world's third largest economy, for one year.

More interesting is the extreme reversal of market sentiment. Considered a "psychological thermometer for investors," theFear and Greed IndexThe market has plummeted from 92 (extreme greed) when Trump was elected to 14 (extreme fear). This precipitous drop in sentiment directly triggered a general sell-off in risky assets.

▍加密貨幣與股市的「連體嬰」現象：為什麼跌勢會同步擴散？

Traditionally, cryptocurrencies are perceived as 'safe-haven assets' or 'independent markets', but the data shows:Bitcoin's 30-day correlation with the S&P 500 has climbed to 0.78(1 is a perfect positive correlation). This means that when the stock market plummets, there is a 78% probability that cryptocurrencies will follow suit.

Three chain effects are intensifying market resonance::

  1. Institutional investors dominate the marketHedge Fund and ETF Managers' Strategies Cover Both Equity and Crypto Assets
  2. Fluid extrusion effect: Margin calls force investors to sell their most liquid assets (including Bitcoin and tech stocks)
  3. Narrative Logic Convergence: Markets form collective judgments about expectations of inflation, interest rate policy, and geopolitical risks.

ralph lauren polo policy black swan: why trump's tariff shock is deadlier than crypto regulation

Interestingly, the market's reaction to Trump's policies has been unexpected - despite his team's favorable policies such as "creating a strategic reserve of Bitcoin,"Investors are more worried about the risk of global trade war triggered by the new tariff policy..

This exposes a deep-seated contradiction in the crypto market:

  • short-term: Still dominated by traditional macroeconomic factors (dollar liquidity, trade policy, inflation expectations)
  • long term: An attempt to build a value narrative independent of the traditional financial system.

As QCP analysts noted in their report, "This strong correlation is here to stay until the crypto market finds a truly differentiated narrative."

▍極端行情中的生存法則：專業機構正在做什麼？

In the face of the dramatic market shocks, the operation strategies of top institutions are polarized:

Risk-averse:

  • Reclassification of Bitcoin Position from 'Risk Asset' to 'Liquidity Reserve'
  • Using the options market to construct a "tail risk hedge" portfolio (buying deep out-of-the-money puts)

The bottom-feeders:

  • Monitor the data in the chain to track the increase in holdings of the "Giant Whale Wallet".
  • Focus on vertical tracks related to AI arithmetic and RWA (Real World Asset Monetization).

Stabolut CEO Eneko Knorr's observation is worth noting: "Bitcoin could be free of correlation as traditional markets enter a long-term bear market. Its long-term value lies in beingHedging tools for the risk of a fiat currency systemic collapseI'm sorry."

ralph lauren polo ralph lauren outlet: three lessons learned from the $6 trillion evaporation

  1. Be alert to extreme points of the sentiment indicator
    When the Fear and Greed Index breaks above 90 or below 20, it often signals a market inflection point. Prior to the current crash, the index had been in the greed zone for over 60 days.

  2. Relevance ≠ causality
    Behind the synchronized crypto and stock market declines is the common pressure of dollar liquidity contraction rather than a direct causal chain.

  3. Syria Swap Determines Rebound Strength
    DeFi narrative saved the market in 2018 bear market; broke in 2020 on NFT; need to wait for a new narrative this time (could be AI+crypto or central bank digital currency integration).

▍風暴眼裡的平靜：專業交易員正在等待什麼？

There are three key signals in the market:

  • Bitcoin Volatility Index (BVOL)Impact on yearly highs suggests a change window is approaching
  • Stabilized Currency Market Capitalization Bucks the Trend(USDT market cap exceeds $110 billion), indicating that OTC capital is waiting to be released
  • Miners' PositionDown to 12-month lows, signaling the end of supply-side selling pressure

This $6 trillion evaporation of wealth is essentially the pain of global liquidity repricing. After the market completes the emotional cycle of "fear-indifference-acceptance", the new game of wealth distribution will start again - the key is whether you are ready to understand the rules, control your emotions, and seize the opportunity.

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