Compiled: Deng Tong, Golden Finance

Several specific factors have led to the latest decline in cryptocurrency prices, including:

The US stock market is difficult to get rid of the recent downturn, Deepseek The market impact is thrown at fermentation.

The cryptocurrency market is still recovering from the $1.4 billion Bybit exchange hack.

With the continuous outflow of cryptocurrency investment products, investors are in a safe-haven mode.

The strong upward resistance has suppressed efforts to recover from global cryptocurrency market capitalization.

U.S. stocks drag down crypto markets

After a sharp drop last week, major U.S. stock indexes failed to try to rebound on Monday afternoon, with the Nasdaq closing down 1.2% and the S&P 500 falling 0.5%.

On February 21 local time, Trump signed a memorandum of "America First Investment". In terms of U.S. foreign investment, the memorandum attempts to strengthen the review of U.S. investment in China. Affected by this, Chinese stocks listed in the United States fell sharply. The decline of the Nasdaq Golden Dragon Index expanded to 5.24%, while the leading technology index of Wande China Technology fell by more than 6%. Popular Chinese stocks fell sharply across the board. Alibaba and Bilibili fell by more than 9%, while JD.com and Tencent Holdings fell by more than 7%.

In addition, Deepseek's impact on the AI ​​market is still fermenting. According to a report released by investment bank TD Cowen, Microsoft has begun to cancel leases for leasing a large number of data center computing power in the United States, or no longer renews the contract, with a total of hundreds of MW, which may reflect Microsoft's doubts about building too much AI computing power in its own right. . After DeepSeek launched an open source AI model that claims to be comparable to American technology at a very low cost, investors have been deeply doubting the continued huge spending of tech giants, including Microsoft.

In addition, Nvidia's financial report is causing concern. Nvidia will release its fourth-quarter earnings report on Wednesday. MarketWatch pointed out last week that the financial report will showcase its new Blackwell chip architecture in more detail. Production has accelerated, but these products face shortages, delays and overheating issues that have allegedly prompted some major customers to postpone orders. These issues have raised concerns about Nvidia's short-term financial situation. And these concerns arise when investors evaluate the slowdown in growth that companies and other big tech companies that are deeply involved in AI — often betting on artificial intelligence by investing billions of dollars and buying Nvidia’s chips. Bank of America Securities analysts said in a report this month that Nvidia's earnings will be "the next important test of the AI ​​bull market", adding that Nvidia's profit per share "is still sufficiently substantial even if there isn't too many gimmicks." .”

Talking about the U.S. economy, Neil Dutta, head of economic research at Renaissance Macro Research, said the risks faced by the labor market are increasing. Real income growth slowed, real estate market deteriorated, and states and local governments were shrinking their spending. Worryingly,The market generally believes that the economy will not slow down, with the median GDP forecast of around 2.5%.

Dutta wrote: “If 2023 is an unexpected rise, then 2025 is more likely to experience an unexpected decline.”

“Passive tightening of currencies is the main risk, which is for finance Market investors have a significant impact,” Dutta continued. "I expect that as risk appetite weakens, long-term interest rates will fall and stock prices will fall. As far as the economy is concerned, job market conditions are expected to worsen."

Ethereum leads market plunge

Today's cryptocurrency market declines It was part of a adjustment that began on February 21, when Bybit cryptocurrency exchanges were hacked and lost more than $1.4 billion worth of ETH and ETH-related tokens, the largest cryptocurrency theft ever.

On February 25, the sell-off continued, including:

Ethereum led the market to decline, down 11.5% in the past 24 hours and trading at $2,503.26.

Bitcoin and Solana also fell, with Bitcoin falling 4.9% to $91,549.81; Solana fell 15.7% to $141.76.

Other cryptocurrencies such as XRP fell 10.8%; Dogecoin fell 13.7%; BNB fell 6.5%.

The large amount of liquidation in the derivatives market makes the problem even more complicated.

The sell-off triggered a leveraged position closing, and as of press time, a total of 316,393 traders have been liquidated in the past 24 hours, with a total liquidation of $952.08 million.

The dominance of long clearings indicates that the cryptocurrency market is over-leveraged when it comes to bullishness.

While market sentiment is currently bearish, cryptocurrency options trading platform QCP Capital said cryptocurrency prices and implied volatility showed a mild reaction compared to the 2022 FTX crash.

QCP Capital stated in a Telegram message that this “highlights the growing maturity of the cryptocurrency landscape”, adding:

"Bybit was able to quickly obtain a bridge loan at critical times to Filling the liquidity gap highlights the resilience and adequate liquidity in the lending sector. The industry has recovered steadily since 2022 and has experienced a sharp surge before last year's U.S. presidential election. ”

Investors continue to circumvent encryption Currency Risks

The continued adjustment of the cryptocurrency market is consistent with the capital outflow of cryptocurrency investment products.

Key points:

Digital asset investment products have experienced capital outflows for the second consecutive week;

According to CoinShares' report, as of the week ended February 21, the capitalThe total gold outflow was US$508 million.

This shows that institutional investors have reduced their investment in digital assets.

Bitcoin has the largest outflow of funds, with a total amount of US$571 million.

Inflows so far this year fell from $7.4 billion two weeks ago to $6.6 billion last week.

Encrypt the capital flow of investment products. Source: CoinShares

James Butterfill, head of research at CoinShares, attributes this to uncertainty in trade tariffs, currency and inflation. "We believe investors are keeping caution after the inauguration of the U.S. president and the uncertainty of trade tariffs, inflation and currency that comes with it."

Meanwhile, market participants are waiting for the last U.S. inflation data this week.

What to know:

The personal consumption expenditure (PCE) index is the Fed's "first-choice" inflation indicator and will be released on February 28.

Last week, the number of first-time unemployment benefits applied for more than the median forecast of 4,000 to 219,000, indicating that labor market conditions are weakening.

This greatly reduces expectations for multiple rate cuts in 2025.

For example, according to the Chicago Mercantile Exchange Group’s FedWatch tool, although two Fed meetings were scheduled during this period, the chances of a rate cut are unlikely.

Federal July 30 FOMC meeting target interest rate probability. Source: CME

The probability of the Federal Reserve keeping interest rates unchanged in the next two meetings is currently: 97.5% in March and 73% in May.

The cryptocurrency market faces huge upper resistance

The market value (total) decline in all cryptocurrencies today is part of the adjustment that began on January 31, with key support areas turning into resistance.

Key Points:

TOTAL is trading below the key supply zone between $3.28 trillion and $3.31 trillion, i.e. the 50-day and 100-day simple moving average (SMA) ).

The Relative Strength Index (RSI) is currently at 40, indicating that market conditions are still favoring the downside.

In addition, the sell-off could cause the cryptocurrency market to fall to the $3.03 trillion support level.

Please note that this has been a key support area for TOTAL since November 20.

Breaking through this level will trigger a sell-off, falling to 200-day SMA $2.72 trillion.

TOTAL/USD daily chart. Source: Cointelegraph/TradingView

In contrast, pushing cryptocurrencies to market capitalization could bring it back to $3.2 trillion or higher to test the above resistance levels.

According to prominent analyst Crypto Zone, the “cryptocurrency market is in a neutral period”, with a 40 index of fear and greed. ”

The analyst added: “This shows that investors are carefully weighing their actions and now is a critical moment in strategic decision-making. ”

BTC bearish to $70,000

BitMEX co-founder Arthur Hayes posted on social media that many IBIT holders are hedge funds, and they earn higher than the short-term U.S. by long ETFs and short CME futures. The yield on Treasury bonds. If the price of BTC decreases, the basis (i.e. the gap between ETF prices and futures prices) narrows, then these funds will sell IBIT and cover CME futures. These funds are currently profitable, considering the basis is close U.S. Treasury yields, which will close positions during the U.S. trading session to cash in profits. I'm bearish to $70,000.

Lekker, a crypto hedge fund that specializes in trading with macroeconomic data Founder of Capital Quinn Thompson posted on social media: “I’m trying to send a message to people who may feel complacent/denied that $95,000 is still not relative to the price I think we can trade in 6-12 months. A bad exit price. ”

Thompson believes that the probability that Bitcoin will not hit a new high in the next three months is 80%, and the probability that it will not hit a new high in the next 12 months is 51%.

Source: Xinhuanet, Sina Finance, Securities Times, Wall Street News, Coindesk, CoinTelegraph, Twitter, etc.